When markets are eaten up by worry it is never easy to change their minds. If he is to do so, Mr Zapatero must take several steps fast. First he must produce a credible medium-term fiscal plan. That means coming clean about debts in the banking system and the regions and speeding up a plan to raise the pension age from 65 to 67. Second, he must do more to help Spanish firms compete—because once it is clear that Spain can grow, its debts will look a lot less scary. His labour-market reform was very timid. A rigidly centralised system of wage bargaining mandates annual pay rises, come what may. He has postponed reforms to pensions and collective bargaining until next year. They may then fall hostage to local and regional elections, before a general election in 2012 that the Socialists will surely lose. So he should redouble efforts to forge a pact with the opposition, and push on with reforms.

The future of the euro rests with Germany and the European Central Bank—they, after all, are the places with the money. But right now, Mr Zapatero is the key. If he acts swiftly, he could play a vital part in saving the currency from collapse.