Spanish Prime Minister Mariano Rajoy meets ministers today to approve a 2013 austerity budget as protests in the capital and dissent from regional leaders deepen his predicament amid the prospect of a bailout.

Ministers will explain how Rajoy plans to meet his commitment to cut the deficit by at least 18 billion euros ($23.2 billion) next year, defying tens of thousands of demonstrators who fought with police in Madrid this week. They called for the premier to reverse his budget-cutting drive and resign. Rajoy told a conference in New York yesterday that the "immense majority" of Spaniards aren't on the street and he still has three years to overhaul the economy.

"Rajoy is likely to face a very tough end of year in terms of social discontent," said Antonio Barroso, a political analyst at Eurasia Group in London and a former Spanish government pollster. "Protests are likely to continue in the future, and the overall degree of mobilization could increase if trade unions decide to call for a general strike."