MATT YGLESIAS is concerned about Spain's deflation and writes: "Austerity not working out so well for Spain." To which I ask: what austerity?

Matt is probably thinking on the announcements made by PM Zapatero last Wednesday, pledging to pretty drastic budget cuts in order to reduce the deficit. But he should know that Zapatero is a serial backpedaller, especially when he gets contested by the unions and fellow liberals. He's well known for announcing something and withdrawing the proposal sometimes just a few hours later (it happened notoriously a few months ago with an austerity plan submitted to the European Union that included raising the retirement age to 67; he sent the plan in the morning one day, and when it was reported in the media, the unions threatened him. He send a second amended plan that same afternoon with the retirement age back to 65).

And boy he's getting a rap: since he's now planning to cut subsidies, public workers' salaries, retirement payments, and not raising taxes at all (at least for now) the unions are all but plotting a general strike, and the left side of the political aisle is accusing him to be a soldout to big business and the powerful. Or something.

That's why Zapatero is now in dear-in-headlights mode: during Wednesday announcement, he said the measures would be approved during yesterday's cabinet meeting, but so far he's put it all off at least until next Thursday. And there's already one big measure dropped: the 5% cut in public workers salaries won't affect public-owned companies (link in Spanish). More cuts are likely to come, if you see the freaked out look in the ministers' eyes as they try to explain the measures in a sort of PR campaign.

So, Matt, it's not that austerity isn't working so well in Spain. It's that virtually no austerity measure has been approved by the government -- other than a reduction in some ministries that will cut costs by a paltry €16 million.

UPDATE. Not so fast, Glenn; not so fast. I'll believe Zapatero's cuts when I see them.