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The situation in Spain is far from pretty. Ahead of yesterday's budget, a general strike shut down swathes of industry, paralysed public transport and brought several large cities all but grinding to a halt. More troubling still were mass demonstrations in which hundreds of thousands of people took to the streets. When it finally came, Prime Minister Mariano Rajoy's budget was no cheerier, slashing a whopping 17 per cent from government spending this year alone in a desperate effort to meet EU-brokered deficit reduction targets.