Argentina’s far-right president promises ‘shock to the system’

Argentina’s new President Javier Milei prepares his people for an economic recovery in his inaugural speech. The austerity measures are likely to be painful.

BUENOS AIRES (AP) — Javier Milei, the libertarian economist beloved by far-right politicians around the world, was sworn in as Argentina’s president on Sunday. He won office on a promise to cut government spending and dramatically transform the country facing its worst economic crisis in two decades.

Milei immediately broke with tradition and delivered his first speech as president outside the National Congress where the ceremony was taking place, symbolically turning his back on the political elite as he spoke directly to his supporters.

Heads of state from all over the world, including the Ukrainian president, sat next to him Volodymyr Selenskyj and allies like the former Brazilian president Jair Bolsonaro.

Argentina’s new President Milei announces “shock therapy” for his country

In his speech, peppered with grim statistics, Milei blamed the outgoing left-wing government for the country’s soaring inflation and poverty rates, for “ruining” the lives of Argentine citizens and for pushing the country to the brink of “the deepest crisis in our history.” brought.

“The difficult decisions that have to be made in the coming weeks are neither wanted nor desired. But unfortunately they left us no other choice,” said Milei. “We will make all the necessary decisions to solve the problem created by 100 years of waste by the political class, even if it is difficult at the beginning. We know that the situation will get worse in the short term, but then we will see the fruits of our efforts.”

Milei, a political outsider who became known here as a television commentatortakes office exactly 40 years after Argentina’s return to democracy after the fall of the brutal military dictatorship.

Libertarian Milei won a stunning victory over the outgoing economy minister last month on promises to overhaul the entire system. During the election campaign, Milei promised to convert the economy to the dollar, reduce the number of ministries by more than half and close the central bank. But in the past few weeks, the radical with the wild hair has backed down. Dollar conversion and central bank closure no longer appear to be on his immediate agenda; Since the election, he has instead focused on what he calls the most pressing issue: reducing the budget deficit.

“I have to tell you again. There is no money,” Milei said in his speech on Sunday, a mantra he has repeated in each of his interviews since his election victory. “There is no alternative to adjustments and shocks.”

Argentina’s new President Milei announces an economic boost

Argentina, which has struggled with inflation and debt for decades, is barred from international borrowing and has not met the terms of a rescue deal with the International Monetary Fund. Latin America’s third-largest economy has a plummeting peso, a 40 percent poverty rate and a central bank with virtually no reserves.

Milei’s office said the central bank closure was “non-negotiable,” but his recent moves suggest the move will at least be postponed. The appointment of Luis Caputo to head the economy ministry – the pragmatic former centre-right finance minister and central bank chief has been dubbed the “Messi of finance” – was hailed as an unexpectedly orthodox and market-friendly choice.

Some of Milei’s recent decisions, according to political scientist Juan Germano, suggest that he is trying to create something different than was expected.

Milei has also moved away from some of his more aggressive foreign policy positions as he seeks to improve relations with leaders and countries he will now deal with. During the election campaign he called China a “murderer state” Pope Francis a “representative of the evil left” and the Brazilian president Luiz Inácio Lula da Silva a “communist.”

Since his election victory, he has called Francis “the most important Argentine in history,” invited Lula to his inauguration (the Brazilian declined) and thanked Chinese President Xi Jinping for his congratulations and wished him the well-being of the Chinese people.

Prominent heads of state from around the world, including the King of Spain, attended Sunday’s ceremony. Among them were several figures from the global far right, including Hungarian Prime Minister Viktor Orban and the leader of the Spanish Vox party, Santiago Abascal.

Trump is absent from Milei’s inauguration

The former US President Donald Trump told his aides that he would like to attend the inauguration, but logistical hurdles prevented the visit, according to two people familiar with the matter who spoke on condition of anonymity to discuss private considerations.

“The support from the right, from Trump and Bolsonaro, gives his figure and his political project a certain legitimacy,” said Argentine political scientist Ana Iparraguirre. These alliances help give credibility to a president who, according to Iparraguirre, is more of an outsider than Trump or Bolsonaro, since he has neither Trump’s experience in the American economy nor Bolsonaro’s experience in Brazil’s military establishment.

As Milei begins his presidency, according to political scientist Andrés Malamud, he faces a huge challenge: finding the political and social support necessary to implement reforms “that the majority considers necessary but for which no one wants to pay.” Because he controls less than 15 percent of seats in Argentina’s lower house and less than 10 percent in the upper house, Milei will have to build alliances in Congress if he wants to push his agenda.

That agenda will face an immediate test on Monday, when Milei is expected to present a sweeping bill to overhaul Argentina’s system with significant state deregulation, an overhaul of labor law, tax simplification and the abolition of primary elections. This could also include the privatization of loss-making state-owned companies.

Prices expected to rise in Argentina

The economy is expected to get worse before it gets better. Prices have increased since Milei’s victory. Economists expect a 20 percent increase in December alone, which will continue in the first few months of a government as the current administration’s artificial price caps are lifted.

But none of this seemed to worry Milei’s followers. As he spoke, a crowd of thousands gathered under the bright sun. They shouted “Chainsaw!” Chainsaw!” – a reference to the power tool that Milei often brought to campaign appearances and with which he promised to cut government funding.

Young men and families filled the square with Argentine flags, Lionel Messi jerseys and pins featuring a lion, a symbol treasured by Milei’s supporters.

After his speech, the new president and his sister drove in a convertible to the Casa Rosada, the presidential palace.

“He told things as they are instead of telling lies,” said one supporter, 18-year-old Enzo Bucci, a business student and delivery driver who had considered leaving the country because of a lack of opportunities.

“I don’t think we’ve ever seen a plan like this in this country, a plan that breaks with the economic model we’ve always had,” he said. “I think it can work.”

Milei’s first speech as president, Malamud said, sought to “prepare people to adapt” to limit possible protests. He avoided mentioning specific policies or concrete plans.

Soon Argentina will know whether Milei has a stabilization plan in the works, Malamud said, “or whether he will just offer pain.”

We are currently testing machine translations. This article was automatically translated from English into German.

This article was first published in English on December 10, 2023 at the “Washingtonpost.com“ was published – as part of a cooperation, it is now also available in translation to readers of the IPPEN.MEDIA portals.