Milei won 2023 election and launched radical reform program.

Milei proposes eliminating central bank and dollarizing economy.

Milei advocates privatizing state services and cutting public sector size.

Milei plans to abolish 10 ministries, including health and education.

Milei will cut public spending 15% and privatize state companies to curb inflation.

Milei will reduce fuel and electricity subsidies.

Milei will sever ties with China and privatize oil industry.

Milei's coalition holds 38 lower house seats, 6 Senate seats; needs majority.

Milei's reforms expected to cause short‑term pain, potential poverty increase during dollarization.

Milei issued 366‑article DNU and 664‑article omnibus bill to repeal laws and grant extraordinary powers.

Omnibus bill grants executive over 1,000 extraordinary powers until 31 Dec 2025, possible extension.

Bill targets privatization of 41 state‑owned companies in energy, aviation, ports, agriculture.

Bill offers 30‑year foreign investment incentive with tax breaks, no import tariffs.

Labor reforms extend probation, reduce protections, curtail right to strike.

Milei cut energy subsidies, removed price controls, devalued peso, causing high inflation.

Milei achieved fiscal surplus two months and cut inflation from 25.5% to 11% by March.

Milei relocated embassy to Jerusalem, refuses left‑leaning regimes, aligns with US‑Israel axis.

Milei secured $4.7bn IMF loan to support reforms.

Milei's political strategy includes anti‑picket protocol, zero‑government‑advertising, threat to govern by plebiscite.

Milei's reforms face opposition from civil servants, unions, IMF creditors, risk social unrest.

Milei won 2023 election and launched radical reform program.

Title:

Content: Business

Emerging markets brace for wave of elections with fiscal discipline at stake

By Godwin Anyebe

Emerging markets are gearing up for their biggest election year in decades, with investors focused on fiscal discipline and populist shifts that could stir markets and blur the outlook for some key economies.

Countries home to more than half the world’s population and accounting for more than 60% of global economic output go to the polls in 2024.

The calendar is bookended by votes in Taiwan in January – a high-stakes geopolitical event – and in sovereign defaulter Ghana in December, as the country strives to emerge from a debt crunch.

“This is an election year like we have never seen before. It really is an extraordinary year,” said David Lubin, associate fellow at think tank Chatham House and Citi’s former head of emerging market economics.

“Recent elections in Argentina and Poland have reminded us that elections do produce surprises,” Lubin added.

READ ALSO: Does Benue have a Chief security officer?

The elections frenzy comes against a backdrop of sharply higher global borrowing rates – piling pressure on more fragile economies even though the prospect of interest rate cuts from the world’s big central banks is firmly on the horizon.

For investors, elections divide into three categories: Those where the outcome is rather obvious, such as Russia or Venezuela; those where it seems clear but the ballot is contested, for example India, Mexico or Indonesia; and those where there is genuine uncertainty, like in South Africa.

The 2023 polls in Argentina and Poland also served as reminders that governments due to face their electorates are more often than not prone to loosening the purse strings – a trend that can leave those who take over struggling to roll back the handouts.

Even when Argentina’s previous government ramped up spending between the first and second round of their vote, radical Javier Milei swept to power and embarked on a radical reform programme. In Poland, the surprise election win of the liberal, pro-EU Donald Tusk got the thumbs up from investors.

Fiscal discipline is seen as key, especially following a series of external shocks ranging from COVID-19 to Russia’s war in Ukraine and a rise in global yields that has highlighted the need for countries to keep spending tightly controlled, said Yvette Babb, a portfolio manager at asset manager William Blair.

“There is very limited margin for populist – often times meaning ‘expensive’ – policy stances across emerging markets,” said Babb. “In many of our markets, elections victories have historically been tied to fiscal stances and populist policy. For this to continue it would be very controversial.”

Morgan Stanley flagged fiscal risks from pre-election spending as a key driver this year for South Africa, Romania, Russia, El Salvador, Dominican Republic and Uruguay.

The ramifications could be felt well beyond this year. The Institute of International Finance (IIF) said the “tsunami” of 2024 elections could add to an already record glut of global debt estimated to have hit $310 trillion by the end of 2023.

“A sudden increase in government spending during this global elections cycle could further elevate interest (payments) for many countries,” warned Emre Tiftik, Director of Sustainable Research at the IIF, adding that this could create further volatility in markets.

Some fear this could spur a resurgence of so-called bond vigilantes, investors who punish profligate governments by selling their bonds, driving yields higher.

Analysts at Citi, who also warn that the looming emerging markets election cycle might see “less policy discipline than investors would like” – have studied the short-term effects markets might have to contend with.

While some votes are bound to generate more volatility than others, currency markets are often the first to feel election nerves, especially in Latin America, according to Citi strategist Dirk Willer.

He points to a reliable pattern for Mexico’s peso that sees the currency weakening in the lead-up to the vote only to strengthen on the emergence of some kind of certainty once the election result seems reasonably established. Latin America’s second-largest economy is scheduled to hold elections on June 2 with the incumbent party’s candidate enjoying a healthy lead in opinion polls.

Evidence of the heavy election cycle shaping investment flows to equities already emerged in 2023, said Karim Chedid, head of EMEA iShares investment strategy at BlackRock.

“We are seeing an evolution of the EM trade from broad to more granular which I am keeping on my radar in 2024 because of the heavy election calendar,” said Chedid, singling out Mexico but also India.

About the author

DailyTimesNGR

Milei proposes eliminating central bank and dollarizing economy.

Title:

Content: International News

Who Is Javier Milei?

Alex Paszkowicz

Brandishing a chainsaw throughout his electoral campaign, the libertarian and self-proclaimed ‘anarcho-capitalist’ Javier Milei won the Argentine general election on 19th November 2023. Milei’s policies and personality cause controversy, so who is the television pundit turned politician?

Beating his rival Sergio Massa with 14.4 million votes to Massa’s 11.5 million, Milei will begin his 4-year mandate starting on 10th of December. After winning a majority of just 4 out of the twenty-four Argentine provinces, Massa conceded defeat at the Unión por la Patria‘s campaign house before the results were officially published.

The centre-left finance minister admits that “obviously these are not the results we hoped for, and I have spoken to Javier Milei to congratulate him because he’s the president that the majority of Argentines have chosen for the next four years”.

Massa has also hinted that he will retire from front-line politics.

The Peronist political movement has been pushed out of government

Milei’s victory has dismantled the left-wing political establishment, even ending Argentina’s 2-party political system. Created in the 1940s by Juan and Eva Perón, the Peronist political movement has been pushed out of government, despite ruling for sixteen out of the last twenty years. His campaign fell short despite Massa continuously appealing to voters’ fears surrounding Milei’s volatile character and risky economic policies.

Compared with Massa, and judging by the election result, Milei is seen as the lesser of two evils in Argentina, as the previous Peronist government could not provide economic stability.

The third-largest Latin American economy has almost reached inflation of 150%, and 40% of Argentina’s 45 million population is in poverty. Furthermore, the International Monetary Fund has rescued the Argentine state twenty-two times, with the most recent loan of $44 billion in 2018.

Milei used his platform […] to circulate conspiracy theories

Economist Sergio Armella believes, “it is indisputable that a swift change from the failed economic policies of the past is imperative. The accumulated economic imbalances have grown too large and must be addressed promptly”.

Nicknamed ‘El Loco’ and before running for president, Milei used his platform on television to circulate conspiracy theories around election fraud and Argentina’s economic problems.

Combined with his extravagant personality and viral TikTok videos, he targeted a younger audience who had grown up through economic hardship and strict Coronavirus lockdowns. Milei’s camp is also known to question the national consensus, which has lasted four decades, over the crimes of its 1976 to 1983 dictatorship, which killed around 30,000 people.

“The reconstruction of Argentina begins” [Milei]

The man with five cloned dogs, each named after a different right-wing economist, claims that with his new mandate, ‘“the reconstruction of Argentina begins”. Calling the result a “miracle” in his victory speech, he says that the result “marks the end of decadence in Argentina”.

He believes Argentina will return to being a “global power”, while alluding to those conspiracies he supported in his past where previous governments, “shared the state amonpoliticians and their friends”.

Although he abandoned his chainsaw to improve his public image, the symbol refers to his promise to decrease inflation by cutting public spending by 15% and privatising state companies, while reducing fuel and electricity subsidies.

Milei wants to abolish the central bank and adopt the US dollar as its official currency, to stop the country from printing more money like previous governments. If the dollar’s value continues to devalue, then inflation could rise with a risk of hyperinflation, which could return after three decades.

Aims to sever ties with China

Milei has no interest in joining the BRICS alliance, and aims to sever ties with China to help move towards privatising state-led companies like the oil industry.

According to economist Elizabeth Bacigalupo, this includes an estimated $10 billion in annual savings on energy imports through a new gas pipeline in Vaca Muerta. Also, this year, the drought in Argentina reduced its agricultural exports from $39 billion in 2022 to $23 billion. But with next year’s predictions, exports could be up to $40 billion.

The problem Milei faces is how fragmented the Argentine Congress is. The coalition he formed with the conservatives after the first round only has 10% of the Senate and 15% of the lower house, meaning he will have to negotiate with his political rivals to push through his complicated reforms.

Any delay in economic progress could lead to more inflation and social unrest.

Despite insults hurled at Brazil’s President, Luiz Inácio Lula da Silva, by Milel throughout his campaign, he wished him support on social media, saying “democracy is the voice of the people and must always be respected”.

Donald Trump believes Milei will “Make Argentina Great Again”

Former US president Donald Trump believes Milei will ‘Make Argentina Great Again’. Businessman Elon Musk expressed a similar sentiment and posted, ‘prosperity is ahead for Argentina’.

Reactions from Milei supporters are varied, with voters desperate for change. A supporter named Michelle Chelsea in Buenos Aires says, “economic policies have led us to this situation. Today, more than half of the population has voted for a different option, and I hope that things will change a lot”.

A Food Service Worker, Alejandro Bravo, is hopeful for the future. “It’s an incredible joy. It’s the end of a never-ending decline, so to corrupt politicians, we say, “get lost”‘.

“We’ve had enough corruption, enough insecurity, enough inflation, enough poverty. We were very tired, we wanted something new, we wanted to see new faces”, states supporter Barbara Rubin.

Alex Paszkowicz

Featured image courtesy of Angelica Reyes via Unsplash. Image license found here. No changes were made to this image.

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Title:

Content: Argentina sees the light with Maverick Javier Milei – Ivo Vegter

In a surprising turn, libertarian firebrand Javier Milei secured Argentina’s presidency after a second-round victory against his left-wing rival. Vowing to end decades of socialist mismanagement, Milei, an outspoken economist, faces challenges in implementing radical reforms, including abolishing ministries and dollarising the economy. While hailed as the world’s first libertarian president, Milei’s uphill battle involves legislative opposition and managing economic pain amid promises of a freer, market-oriented Argentina. Skepticism remains, awaiting the true impact of his ambitious plans in a nation grappling with deep-rooted economic struggles.

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Argentinians see the light

By Ivo Vegter*

It took a second round of voting, but the libertarian Javier Milei has defeated his Peronist rival to become president of Argentina.

A month ago, Javier Milei unexpectedly lost the first round of the Argentinian general election to his left-wing Peronist rival, Sergio Massa, after the latter had cynically promised zero taxes as a way to bribe voters.

In my column on the lessons South Africa could draw from that election, I said: ‘Let’s hope Argentinians see the light before Massa and Milei face off in the run-off election.’

Happily, they did see the light.

After decades of economic malaise under a government that for most of the last 30 years has been socialist, corrupt, wasteful and incompetent, leaving Argentina eighth from last in the Fraser Institute’s Economic Freedom of the World Report 2023, they elected Milei, a libertarian firebrand, in the biggest landslide since Juan Perón’s election in 1973.

Milei becomes the first libertarian president, not only of Argentina, but in the world. The closest precedent that comes to mind is that of Calvin Coolidge, the small-government conservative president during the Roaring Twenties in the US, but Milei is far more radical than that.

‘“oday the reconstruction of Argentina begins’, he said, after winning 56% of the vote in the head-to-head race. That was also his first lie as president-elect, since he doesn’t actually take office until 10 December, but we’ll let that slide.

Radical

To describe Milei as radical would be putting it mildly. He has described the country’s ruling elite as thieves and the government as ‘a criminal organisation’. He has promised to abolish ten of the government’s 18 ministries. He said he would do away with the central bank and dollarise the Argentinian economy.

‘The model of decadence has come to an end’, he told his supporters. ‘There’s no going back. We have monumental problems ahead. Inflation, lack of work, and poverty’.

Milei is an accomplished economist, and largely follows the Austrian School of individualist free-market economics. He has variously described himself as an anarcho-capitalist and a minarchist (an anarchist who accepts the legitimacy of a small government dedicated to protecting life, liberty and property).

He has been extraordinarily outspoken on the evils of socialism and statism, and how they turned Argentina from a once-wealthy world power into an over-indebted, poverty-stricken, underdeveloped basket case.

Mainstream media

The mainstream media, with its largely left-leaning bias, has compared Milei to former presidents Donald Trump of the US and Jair Bolsonaro of Brazil.

‘Argentina set for sharp right turn as Trump-like radical wins presidency’, trumpeted the Washington Post

‘Argentina Elects Javier Milei in Victory for Far Right’ was the headline in the New York Times, which added: ‘Argentina’s next president is a libertarian economist whose brash style and embrace of conspiracy theories has parallels with those of Donald J. Trump.’

The ‘embrace of conspiracy theories’ is a particularly vicious jab. Readers would have to follow a link to find an explanation, and it turns out that the Times only referred to Milei’s allegations of polling irregularities, which have not been tested.

It is entirely plausible that Argentina’s electoral system is less secure than that of the United States, and that the incumbents – who went as far as abolishing taxes in order to engineer a win – might have been involved in some electoral skulduggery.

Allegations of election fraud are very common on all sides of the political spectrum, and do not, in and of themselves, rise to the level of the debunked claims of Trump, and his attempt to derail the orderly election of his rival.

Authoritarians

More importantly, both Bolsonaro and Trump are alt-right populists. They are moral authoritarians – not liberals – and appeal to collectivist – not individualist – principles such as nationalism and protectionism. They have often, rightly, been described as fascist, which is just as antithetical to libertarians as is left-wing socialism.

That both former presidents expressed their support for Milei has a lot more to do with shared anti-socialist positions than any real congruence in their political philosophy.

Milei has himself rejected the right-wing label, and indeed, his classical liberalism (for which ‘libertarian’ in the American sense is a synonym) does not yield to a simplistic left-right analysis. Rather, it falls on the liberal end of an authoritarian-liberal scale, and on the progressive end of a conservative-progressive scale.

Sour-grape-ish

Milei does have some views that are questionable, or traditionally associated with the conservative right, such as his anti-abortion stance and his rejection of climate alarmism.

Neither define him, however, and both are issues on which libertarians can and do disagree.

By similar logic, Milei’s promise not to dismantle Argentina’s extensive social welfare programmes does not make him some sort of left-winger.

In focusing on incidental agreements between Milei and leaders like Trump and Bolsonaro, and ignoring the fundamental philosophical differences between the former’s individualist, free-market, small-government ideas and the authoritarianism, nationalism, populism and protectionism of the latter, the media does both Milei and their readers a great disservice.

That a politician does not perfectly reflect all one’s personal political or moral views is in any case far less of a concern when that very politician proposes as far as possible to keep government out of people’s personal affairs and to leave most of the world’s problems to the private sector.

‘When your response to everything that is wrong with the world is to say, “There ought to be a law,” you are saying that you hold freedom very cheap’, said Thomas Sowell.

Moreover, it seems extraordinarily petty and sour-grape-ish to complain about a few differences of opinion with a candidate who promises radical change in a country that is mired in economic crisis, thanks to the policies of its incumbent rulers.

Music to the ears

Sniping from the mainstream press aside, the rise of a truly libertarian president in one of the world’s most economically unfree countries should be music to a classical liberal’s ears.

Who doesn’t want to radically slash the size of government? Who doesn’t question the inflationary monetary policy of highly indebted countries? Who doesn’t want to see free enterprise flourish, and witness the departure of a government that strangles business with red tape and taxes, and tries to pick winners by throwing subsidies at favoured companies?

On the face of it, this should be an excellent experiment to show whether the libertarian prescriptions for government do, indeed, produce a better outcome than the socialist quagmire in which Argentina has been stuck for so long.

Pain and gain

Practically speaking, however, there are reasons to remain skeptical.

First, we’ve only seen Milei’s talk, and not his walk.

Second, making drastic changes in the structure of a country’s government and economy, as Milei proposes, will be painful.

It is arguable that the short-term pain is justified by the long-term gain, but electorates are rarely forgiving to those who inflict necessary pain. Witness Margaret Thatcher, who saved Britain from the socialist economic malaise of the 1970s, but remains hated to this day by those who bore the brunt of her reforms.

Dollarising an economy does not produce immediate results, for example. It can take years before the stabilising effect of dollarisation filters through to low inflation rates. It can, however, immediately harm people and even increase poverty levels, depending on the exchange rate at which existing deposits are converted.

Drastically reducing the size of government will also face much immediate opposition, especially from civil servants who stand to lose their jobs.

Privatising healthcare, education or other government functions is also fraught with transition difficulties. Much depends on exactly how such privatisation is carried out. It can fail, and even if the eventual outcome is a success, it could cause years of disruptions and dissatisfaction.

Then there are the entrenched patronage networks of the incumbent socialist government, who will be highly upset – and fight back vigorously – when the taps of corrupt fiscal spending get turned off.

Finally, few voters have the patience to wait five or ten years for radical free-market reforms to have a positive impact, and Argentina’s president only serves a four-year term before facing the electorate again.

Legislative opposition

A further obstacle to Milei’s reforms is that he will not be the philosopher-king of every libertarian’s dreams. He will not be a dictator.

He will simply be the head of the executive in a constitutional parliamentary democracy, with strictly circumscribed powers.

And the elections did not result in a similar landslide in the legislature.

Argentina has a 72-seat Senate, or upper house, and a 257-seat Chamber of Deputies, or lower house. Together, they make up the Argentinian National Congress.

In both houses, Milei’s libertarian coalition, Liberty Advances (La Libertad Avanza, or LLA) took more seats from the conservative coalition, Together for Change (Juntos por el Cambio, or JxC), than from the socialist Peronista coalition, Union for the Homeland (Unión por la Patria, or UxP).

In the Senate, this leaves the Peronistas as the largest coalition, with 32 seats. It would need 37 seats to command an outright majority. The conservative coalition, JxC, retains only 27 seats. As the third-largest party in the Senate, Milei’s LLA only has six seats, which even in coalition with the conservatives is not enough for an outright majority.

In the lower house, the picture is similar. UxP has 104 out of 257 seats, JxC has 93, and LLA has 38. The only difference is that here, a JxC and LLA coalition can command a simple majority.

This leaves Milei at the mercy first of the conservatives, who would welcome market-oriented reforms and a departure from socialism, but by their very nature would be reluctant to endorse Milei’s more radical, disruptive proposals. Once Milei has cleared that hurdle, he needs to gather a majority in the upper house, which will be even harder.

Argentina is also heavily indebted, including to the International Monetary Fund, and creditors are likely to have a say in how the country is run. Anything that scares them will raise the cost of credit, which Argentina can ill afford.

Wait and see

Once the initial euphoria of seeing a true libertarian in power has cleared, then, we are left with the sobering realisation that Milei may not be able to achieve anywhere near as much as he has promised.

Turning failing countries around is not for the faint-hearted, and it always comes with social upheaval and economic pain.

Even if Milei gets the good ship Argentina pointed in the right direction again, the prevailing winds and currents may still dash it – and its captain – upon the rocks.

Read also:

*Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets.

This article was first published by Daily Friend and is republished with permission

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Title:

Content: Two events and an indication that took place last week suggest that there is a new rise of the extreme right in the world, from Europe and the United States to South America.
The three events are the electoral rise of the Dutch far-right Freedom Party, then the victory of the extremist Javier Milley in the presidency of Argentina, and the third indicator is the continued rise and lead of Donald Trump in the opinion polls.
The right-wing Freedom Party won 37 seats in the Dutch parliament, more than double its share, and will therefore have the upper hand in forming a government.
Geert Wilders, 60, founded his party in 2006 with the aim of defending Dutch, not European, culture and identity.
One of the party ’ s most important slogans is to fight against immigrants, especially Arabs, and it has called Moroccan immigrants “scum ” and organized competitions for cartoons offensive to the Prophet Muhammad (PBUH), and vowed to ban the Koran, mosques and the hijab.
He pledged to stop the tsunami of asylum seekers, impose strict controls to “protect Dutch identity and values ” and deport Syrian migrants.
He is also skeptical of the European Union and considers Brussels and its excessive bureaucracy a threat to national sovereignty, calling for greater control over laws, borders and economic policies and pledging to hold a referendum on his country ’ s remaining in the bloc.
The Freedom Party says it is a great friend of the only democracy in the Middle East, Israel, and that relationship will be strengthened by moving the embassy to Jerusalem and closing the Dutch cultural center in Ramallah.
The second important event was the victory of Javier Milley as president of Argentina, whose basic policies are almost identical to those of the Freedom Party in the Netherlands and other far-right forces and parties in the world.
He said his first foreign visit would be to the United States and he would meet with a number of Jewish rabbis there, because he follows their teachings.
The second visit will be to Israel, pledging to move his country ’ s embassy to occupied Jerusalem, and his foreign policy will focus on cooperation with the “American-Israeli axis ” and will not negotiate with leftist regimes such as Brazil and China.
The first to congratulate him was also the right-wing former Brazilian president Jair Bolsonaro.
Milley pledged to deal in the US dollar, abolish the central bank, abolish the health and education ministries, and privatize some major public companies.
But the irony is that the new president ’ s party, Freedom Advances, did not get any of the governors ’ posts, which are dominated by the Peronist movement, and he was also remarkable for saying that his country would not participate in the BRICS and did not intend to work with Russia, China and communist countries.
Millie also said he admired Trump and the latter said he would attend his inauguration.
The third indicator is that opinion polls indicate that Donald Trump is ahead of all potential challengers in the presidential election late next year.
A recent Harvard Center poll with The Hill found that Trump had 48 percent of respondents compared to 41 percent for current president Joe Biden, and even the uncertain 11 percent, when asked again, 53 percent said they would vote for Trump and 47 percent for Biden.
In November, a New York Times poll showed that Trump was five points ahead of Biden in Arizona, six in Georgia, five in Michigan, 10 in Nevada and four in Pennsylvania, while Biden was just two points ahead of Trump in Wisconsin.
From the previous events and indicators, it can be concluded in principle that with the sharp polarization in international relations, the severe economic crisis resulting from the Coronavirus epidemic, the Russian-Ukrainian war, inflation, recession and the Israeli attack on Gaza, the rise of far-right forces will continue in many countries of the world, especially Europe, especially the eastern side.
This means that in the next stage, the world will come to periods of intense polarization, conflicts and possibly wars.

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Argentina presidential election: A runoff of economic ideals

Tobias Käufer
November 17, 2023

Argentina's Economic Minister Sergio Massa and libertarian Javier Milei face off in a nail-biting presidential runoff. The two candidates have radically different solutions to Argentina's economic woes.

https://p.dw.com/p/4YuiH

Economic policy is the key issue in Argentina's runoff election on Sunday, as voters decide between the economic policy of current Economy Minister Sergio Massa and his rival Javier Milei, a far-right libertarian economist known for his radical free-market liberalism.

Argentina's dire economic figures recently reported by the National Statistics Institute (INDEC) may speak for a change after the depressed Latin American country's cost of living surged a staggering 142.7% over the year. The poverty rate in September stood at 38.9%, according to the Buenos Aires-based Pontificia Universidad Catolica (UCA).

Argentina unveils new 2,000-peso bill as inflation bites

Milei's radical ideas for Argentina's economy

Argentina has for decades been plagued by financial chaos and weak economic growth which opposition candidate Javier Milei says is the result of successive left-leaning governments and their failed socialist economic policy.

"Those who have led us into inflation and poverty are now trying to instigate fear [among the population]. Argentina was a world power at the end of the 19th century, then came the decline under the socialist governments," Milei said this week at a campaign event in Rosario in the province of Santa Fe.

He's repeatedly accused his center-left rival of running a fear campaign that would denounce him as an ultra-right hardliner who would seek to undo basic rights and democracy in Argentina. In his campaign, Milei is styling himself as the defender of the country against populism as he aims to "reduce privileges, not rights."

Milei has attracted a lot of attention for his promises to radically overhaul the Argentine government and economy with a plan to eliminate the nation's central bank and replace its currency with the US dollar. He wants to significantly reduce the state apparatus, lift laws and regulations on the economy, and privatize state services. Other controversial proposals from his camp include liberalizing organ trade and privatizing Argentina's territorial waters.

With his radical free-market orthodoxy, Milei hopes to spur economic growth and subsequently lift more Argentines out of widespread poverty.

Massa's gentler economic reforms for Argentina

Sergio Massa is a veteran of Argentine politics and the new leader of the Peronist political movement which is based on the left-wing ideas of former President Juan Peron, who ruled Argentina several times between the 1940s and 1970s. The so-called Peronists have won nine of the last 12 free and fair presidential elections.

Massa has replaced Alberto Fernandez as the Peronist frontrunner after the hapless president voluntarily resigned in April this year. He was the winner of the first round of voting in October after making a surprise comeback from poor pre-election polls capturing nearly 37% of the vote, compared with 30% for Milei.

Massa, who has led Argentina's economy for more than a year, pushed through several policies in support of his candidacy, including programs that return sales tax to certain workers and eliminate income tax for others. He has promised to maintain some economic policies that conservative economists criticize, such as large subsidies for Argentines' energy costs.

In addition, he hopes to generate enough tax and trade surpluses to help negotiations with the International Monetary Fund (IMF) on restructuring Argentina's massive debt.

Argentina's untapped economic potential

Argentina has much to offer to the rest of the world but has yet to leverage it for the benefit of the entire population. This includes large lithium deposits crucial for the transition to e-mobility, as well as offshore oil reserves and abundant natural gas reserves. Moreover, it has the potential to produce green hydrogen, its farming sector is competitive, and the country has a young, well-educated population.

"The biggest challenge for the next government is to develop an initial stabilization plan and then push through a series of structural reforms to profoundly change the economic system," Agustin Etchebarne, director of the Libertad y Progreso Foundation in Buenos Aires, told DW.

Etchebarne is part of a group of economists who condone radical structural changes to the economy to lift Argentina out of its current crisis. Others, including about 100 renowned international economic experts, are more skeptical.

In an open letter recently, some high-profile economists the likes of Thomas Piketty from France, Jayati Ghosh from India, and the former Finance Minister of Colombia, Jose Antonio Ocampo, have warned Milei's proposals are "full of risks that could potentially be very harmful to the Argentine economy and the Argentine people."

This article was originally written in German.

Milei advocates privatizing state services and cutting public sector size.

Title:

Content: No, Milei Is Not A Fascist – OpEd

By

By Benjamin Williams

The electoral victory of Javier Milei in Argentina was a pleasant surprise to libertarians internationally. For the first time ever, an open anarchocapitalist was elected president of a sovereign nation. Milei’s fame isn’t limited to libertarian circles, though. Right-wingers all over the world have praised him for his battle against corruption and economic ruin. He was even given a spot headlining for former president Donald Trump at the Conservative Political Action Conference 2024, one of the biggest conservative events in the United States. Currently, he is one of the most popular heads of state in the world. Quite a lot of impressive feats for someone of a heterodox philosophy.

Milei is an Austrian economist. He taught economics for over twenty years and became quite the celebrity while doing it. Argentine TV stations would bring him on to debate leftists, and these station audiences grew very fond of his intellect and crass insults toward his opponents. His debate style is a reminder of Murray Rothbard’s hilarious quote: “I’ve always been in favor of refuting the doctrine and then attacking the person; that’s not an ad hominem fallacy.”

Milei’s competence as an economist has been very apparent in his presidency. Under his guidance, Argentina has seen “two consecutive months of financial surplus for the first time since early 2011,” quite an impressive feat. Its month-over-month inflation rate went from 25.5 percent in December to 20.6 percent in January, 13.2 percent in February, and 11 percent in March. Argentina is healing. Slowly, but surely.

The Attacks on Milei

Although Argentina is seeing improvements and Milei is doing an impressive job, he is the target of near-constant attacks from leftists all over the world. Some of the most common weapons being used are accusations of “far-right” politics and “fascism.” A writer at Foreign Policy called him a “wannabe dictator,” while the World Socialist Web Site said his speech at Davos, during which he condemned fascism, was a “fascist rant.” One viral post on Elon Musk’s X read:

Javier Milei continues his fascist rampage in Argentina.

He has authorised the Privatising of all remaining State owned industries (thats his donors cashing in).

He has also authorised the sale of all Social Housing and removed all rent controls

It is going exactly as expected

It is almost a rite of passage for an Austrian economist to be labeled Far Right, fascist, a Nazi, racist, or homophobic. God knows Rothbard and Hans-Hermann Hoppe have been called those things thousands of times over. Leftists have even gone so far as to call Ludwig von Mises, a Jew who fled the Nazis, a supporter of fascism. Quite absurd. If any of these critics bothered to read into what actual fascists believed, they’d realize that these Austrian economists are the opposites of fascists in almost every way.

Milei versus Mussolini

The dictator Benito Mussolini and his close comrade Giovanni Gentile were indisputably fascists. They invented fascism, wrote fascist literature, and called themselves fascists. So it stands to reason that if you want to see if Javier Milei is a fascist, you’d compare him to these fascists. The critics never make these sorts of comparisons because they’re aware it would expose their ridiculous accusations for what they are: ahistorical and ignorant.

Mussolini viewed the state as almost something to be worshipped, with his works riddled with references to its greatness and importance. He summarized his view with the mantra, “Everything within the state, nothing outside the state, nothing against the state.” In stark contrast, Milei’s speeches, debates, and rants are filled with insults and criticisms directed at the state. One of his most famous quotes, “wipe my ass with the state,” encapsulates this disdain. Milei does not hold the state on a pedestal like Mussolini did.

Mussolini believed that capitalism was deeply flawed and needed to be abolished. In “The Political and Social Doctrine of Fascism,” he states that the state was “the force which alone can provide a solution to the dramatic contradictions of capitalism” and that fascism would replace capitalism with “a system of syndicalism.” On the other hand, Milei holds a contrasting view. He frequently praises capitalism as morally and economically superior. In his World Economic Forum speech—dubbed a ‘fascist rant’ by socialists—he declared that people should resist the state, asserting, “The state is not the solution. The state is the problem itself.”

Milei’s policies are certainly not fascist either. Mussolini’s dictatorship supported the socialization of industry, not privatization. His dictatorship mandated union membership, harshly regulated industries, and socialized over eighty firms. In 1934, he bragged that “three quarters of the Italian industrial and agricultural economy” were controlled by the state. Mussolini poured investments into social housing. In Rome alone, ninety-seven thousand apartments were built from 1924 to 1930. The fascist government built 147 brand-new towns from 1922 to 1944. In April 1934, he declared a 12 percent reduction in rents and implemented rent control that wasn’t repealed until 1978. The X post by one of Milei’s critics demonstrates that Milei’s policies are exactly the opposite of this.

The Defeat of Fascism

Milei is no fascist; if anything, he defeated fascists. Milei’s opponent in the previous election was an open Peronist. The Peronists follow the ideas of Juan Peron, who is commonly identified as a fascist or very close to one. Peron praised Mussolini and credited him for some of his philosophy as well as helped Nazi war criminals escape Europe, and his economic policies were much closer to Mussolini’s than Milei’s. Milei’s victory marks a new beginning for Argentina, a beginning where fascism is no longer the dominating ideology.

  • About the author: Benjamin Williams is a fellow with FEE’s Henry Hazlitt Project for Educational Journalism. He has produced videos and written content for many libertarian organizations such as the Mises Institute and Students For Liberty. Under the alias PraxBen on TikTok, he has amassed over 200,000 followers and 100 million views promoting sound economics and libertarianism to younger audiences. He also heads up the TikTok and Twitter accounts for FEE.
  • Source: This article was published by the Mises Institute

MISES

The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, the Mises Institute seeks a profound and radical shift in the intellectual climate: away from statism and toward a private property order. The Mises Institute encourages critical historical research, and stands against political correctness.

How will Milei's reforms impact workers?

What does Milei promote in terms of healthcare and education?

Individuals to pay for their own services

How will Milei's reforms impact workers?

What does Milei promote in terms of healthcare and education?

Individuals to pay for their own services

How will Milei's reforms impact workers?

What does Milei promote in terms of healthcare and education?

Individuals to pay for their own services

How will Milei's reforms impact workers?

What does Milei promote in terms of healthcare and education?

Individuals to pay for their own services

Milei plans to abolish 10 ministries, including health and education.

Milei will cut public spending 15% and privatize state companies to curb inflation.

What economic issue did Milei want to address?

Milei will reduce fuel and electricity subsidies.

Milei will sever ties with China and privatize oil industry.

Milei's coalition holds 38 lower house seats, 6 Senate seats; needs majority.

Milei's reforms expected to cause short‑term pain, potential poverty increase during dollarization.

Milei issued 366‑article DNU and 664‑article omnibus bill to repeal laws and grant extraordinary powers.

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Argentina’s Javier Milei Is Looking To Bluff His Political Rivals

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And just like that, Argentina’s ultra-libertarian president, Javier Milei, sent the whole socio-political-economic ecosystem into disarray

Praised for his moderation and pragmatism during the first few weeks of his presidency, the self-proclaimed anarcho-capitalist has now put in place a series of controversial measures which have divided public opinion, generating a new iteration of Argentina’s infamous “grieta,” our very own version of the polarization that has now become the norm across the so-called ‘Western World.’ But, it’s no longer about the antagonism between Kirchnerites and their opponents, mainly represented by Mauricio Macri and the Juntos por el Cambio coalition, but about those blindly in favor of the wild-haired economist and those denouncing his every move as a diabolic, anti-democratic part of a ferocious plan to tear down the tenets of Argentine society.

Both sides seem to agree that he is executing a carefully crafted plan that will either elevate Argentina back to the lost status of “global power” of the late 19th century or ravage the nation in order put it on the chopping-block and conduct a fire sale to hand over the crown jewels to global financial elites. Those with access to the Casa Rosada tell a different story though, one of amateurism and incomplete staffing that would suggest the La Libertad Avanza coalition is acting more out of necessity than Machiavellian genius.

Milei finally broke out of his honeymoon period with those who didn’t vote for him after launching a massive package of reforms through a “decreto de necesidad y urgencia,” an emergency decree (DNU) which has become the standard practice for presidents seeking to bypass Congress and is generally used for less ambitious projects. The DNU is truly massive, with 366 articles including the repeal of multiple laws which call into question the constitutionality of the measure, even if governing via DNU is already contrary to the spirit of the Constitution and something that has happened in each of the last several administrations. It was quickly followed by the Omnibus law, equally as massive in its scope and ambition, and its capacitiy to divide the political field.

Put together by liberal economist Federico Sturzenegger, who ran the Central Bank under Macri and helds no role in the Milei-Villaruel administration until after the project was presented, the “mega-decree” was announced by national (and obligatory) broadcast several weeks in a dramatic scene that had Milei as the protagonist in the foreground and his whole team standing behind, statue-like, as the president read sternly.

Earlier that day they had scored a political victory with Security Minister Patricia Bullrich’s “anti-picket” protocol making its debut, effectively diluting the first public protest against the government. Some reports indicated there was more security than 'piquetero' protesters. Weeks later, the General Confederation of Labor united the pan-Peronist opposition in a massive march that managed to remain cordial, respecting Bullrich's protocol by trying to show political muscle in the streets.

The reform package conformed by DNU and Omnibus bill immediately generated the reaction of Milei's political opponents, along with a substantial portion of the population who took to the streets for a traditional “cacerolazo,” a protests with pots and pans reminiscent of the worst days of the 2001 crisis. There are no coincidences. Congressional leaders from the pan-Peronist Unión por la Patria coalition spoke with union strongmen from the General Confederation of Labor (CGT) umbrella union group. Members of the Unión Cívica Radical (UCR) warned of unconstitutionality and specialist lawyers indicated Milei was trampling all over the Constitution by failing to respect the separation of powers. Buenos Aires Province governor Axel Kicillof, probably the leading member of the Peronist opposition, and his government decided to ignore Bullrich’s “anti-picket” protocol claiming it violated the constitutional right to protest. A few weeks before, Economy Minister Luis ‘Toto’ Caputo unveiled the government’s initial economic plan, generating a similar reaction in the political field which didn’t seem to make its way to the general population. The situation is beginning to change and as the actual implications of the Milei administration’s actions make an impact, social and political actors will begin to respond.

There should be few doubts that one of the strongest points of La Libertad Avanza’s electoral strategy had to do with communications, particularly on social media. These early moves suggest they will try and double down, betting on the use of their skills to try and compensate for the lack of political support, despite a strong victory over both Sergio Massa and the Peronists, and Bullrich and Juntos por el Cambio. Toto Caputo, however, is known to be particularly uncomfortable with the media. His pre-recorded message several weeks ago announcing tough economic measures — many of which contradicted Milei’s campaign promises, particularly tax hikes — was delayed several times reportedly due to the need for multiple takes and Milei’s direct involvement (or maybe indirectly through sister Karina). The second measure he announced, for example, was a year-long reduction of government advertising to zero – a direct strike to the beleaguered media industry and a measure that has practically zero impact on the deficit but high popular approval. The over-dramatization of the security operation to contain a moderate-to-small protest early into the presidency, together with pictures of Milei and Bullrich supervising from police headquarters, allowed them to take advantage of the far-left Partido Obrero to score an easy win and show his electorate that they can control the streets. Yet, controlling a couple of thousand protesters is one thing. The CGT protest that brought together the political and social power of the unions remained under control, and that's a win for the government, but it was a political protest. If the middle class begins to lose its temper, and expectations, Milei could face a much more difficult scenario.

The “basis for the reconstruction of the Argentine economy” reform package could be another attempt to win the communications game and take the spotlight to appear active in the eyes of the public opinion. With absolute minorities in both chambers of Congress and several controversial reforms included in a massive package passed by Milei’s mega-DNU, it's difficult to imagine that it will quickly pass in the Chamber of Deputies, despite an early win at the commission level with the help of the former Juntos por el Cambio coalition. Furthermore, several interest groups are putting together legal arguments to dispute the issue in court, especially the labor reform which has been stayed. It could quickly make its way to a Supreme Court that has already proven eager to interject politically.

Ultimately, most, if not all, of the regulations, laws, and measures included in the decree will have to make their way through Congress and will therefore be subject to negotiations and amendments. Yet, Milei has shown initiative and wants to maintain, or extend, the popular support which took him to victory in the run-off and has already generated a circumstantial majority in the Senate to defeat the Peronist caucus and at the commissions to get the Omnibus bill past the first obstacle.

There are risks that the ultra-libertarian could prove authoritarian and anti-democratic. He’s shown some of that in the past, particularly by claiming he would govern by plebiscite if he didn’t have the support of Congress (something Hugo Chávez did to amend the Venezuelan constitution) and by picking a dictatorship denialist as his running-mate. Many of his detractors have pointed to signs that suggest Argentina could descend into a state of totalitarianism, and this emergency decree fuels their suspicion.

It’s not clear whether the conditions for such a situation are in place. For now, he seems to be bluffing his political opponents. We’ll see if someone calls his hand.

This piece was originally published in the Buenos Aires Times, Argentina's only English-language newspaper.

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Content: Argentina’s Javier Milei’s “Instant Democracy” and Neoliberalism

Javier Milei, YouTube screen grab.

Self-described “anarcho-capitalist,” Javier Milei became the president of Argentina in December 2023 promising “drastic” measures to temper the inflation crisis that has gripped the country. In the weeks since his election, Milei has brought forward an ambitious neoliberal restructuring program encompassing almost every aspect of the government.

Milei’s agenda confronts considerable opposition in Congress, where his governing coalition, Libertad Avanza, holds only a fraction of the seats. To adjust to these circumstances, Milei has cultivated a strategy of “turbo-politics,” bypassing legislative processes that risk delaying the implementation of his state reorganization plans.

Milei’s approach to Congress is symbolic of a decades-old strategy I have elsewhere called “neoliberal parliamentarism.” This concept describes a pattern of deliberate efforts to reform or subvert legislative institutions as a means of facilitating neoliberal reforms that do not have sufficient popular support to be actualized through usual democratic channels. These changes, even when temporary, often leave long-term scars on institutions by weakening norms of institutional forbearance.

The Emergency Decree and the Omnibus Bill

Milei has followed this blueprint, insulating the core elements of his agenda from democratic influence. The dismantling of the Argentine state began in earnest in mid-December when the executive branch presented an 83 page Necessity and Urgency Decree (NDU) aimed at repealing over 300 various laws and regulations, facilitating the privatization of core public assets.

This “mega-decree,” Milei claimed, was necessary to “start to undo the huge number of regulations that have held back and prevented economic growth”. It includes sweeping economic deregulation, such as the elimination of regulations on Argentina’s supermarket laws, which required the guarantee of low prices on basic products. It also includes measures to eliminate rent controls. Suggested labour reforms to cut pregnancy leave and increase the job probation period were suspended by the courts in January 2024.

Less than a week after issuing the NDU, the executive branch sent a massive omnibus bill titled Foundations and Starting Points for the Freedom of the Argentine People to Congress for consideration. The bill bundles the major elements of Milei’s neoliberal restructuring initiatives under the heading of a single piece of legislation with 664 articles. It will enable the government to carry out, in a matter of weeks, what would normally take years to achieve if these reforms were considered independently and subjected to the usual legislative scrutiny.

Reforms from the 351 page bill include an extraordinary provision declaring a state of public emergency on matters related to the economy, fiscal balance, social security, defence, health, and administration.

The emergency declaration delegates more than 1,000 extraordinary powers from the legislative to the executive until December 31, 2025, with the possibility of a two-year extension. This provision would enable Milei to make major reforms without having to consult Congress, thus eliminating a major hurdle to the implementation of neoliberal reforms.

Authors of the bill are attempting to facilitate the privatization of 41 state-owned companies across various sectors including energy, aviation, port administration, and agriculture. They also enable the reorganization of public administration, including embedding regulatory cuts from the NDU into law.

Additionally, the omnibus legislation proposes substantial reforms to environmental protection laws. These changes include the weakening of the Glacier Protection Law, allowing the mining of sensitive “periglacial” areas. The bill is presently being rushed through the legislative process by way of Extraordinary sessions of Congress, leading to marathon sittings during Argentina’s usual summer recess period.

“It’s impossible for people to have an idea of the enormous number of proposals Milei has sent,” said Ricardo Gil Laverda, a constitutional lawyer and former Argentine Justice Minister. “They cover dozens and dozens and dozens of laws, often on deep topics.”

To influence negotiations, Milei has threatened to put forward a non-binding referendum if the opposition parties do not agree to the main terms of his restructuring plan. Milei has also threatened to take away social welfare rights from protesters who block streets.

Despite these efforts, however, the reality of Milei’s lack of Congressional support has led him to compromise on some elements of his agenda as it makes its way through the legislative process. Although the structure of the bill remains, opposition politicians have made more than 100 changes to it, including curtailing the scope of the President’s emergency powers to one year rather than two, and retaining YPF, the national oil and gas company, in public hands, despite allowing most other state-owned companies to remain subject to privatization.

Neoliberalism and the Decline of the Legislature

Argentina is not unique. This most recent example of legislative subversion is a familiar tactic used to accommodate neoliberal restructuring, that has been utilized repeatedly by neoliberal reformers in recent decades, including the IMF-sanctioned omnibus bill rammed through Greece’s parliament in 2014.

This approach to the legislature is the consequence of the political limitations of neoliberal policy, which is opposed by considerable segments of society. A blueprint for this strategy is spelled out by former New Zealand Minister of Finance Roger Douglas in his 1993 book, Unfinished Business. The book recalls lessons from his experience implementing a neoliberal agenda dubbed ‘Rogernomics’ in the 1980s against the headwinds of widespread social and political opposition.

Douglas claimed it is “uncertainty, not speed, that endangers the success of structural reform programmes.” Neoliberal reforms should not be passed incrementally, but as a rupture, moving in “quantum leaps” to overcome popular opposition.

Democratic processes are typically slow and deliberate, designed to enable the legislative body to scrutinize the executive, foster compromise, and encourage debate. It was necessary, therefore, to streamline the democratic process to ensure that politicians could neither interfere with, nor demand meaningful changes to, neoliberal reorganization efforts.

Neoliberal governments should confront the legislature, not as an essential element of the process of democracy, but an instrument used by politicians and vested interests to interfere with the operations of the marketplace. “Speed is essential. It is almost impossible to go too fast,” Douglas said. “Once the programme begins to be implemented, don’t stop until you have completed it.”

This tactic did not occur in a vacuum, but emerged intrinsically from the content of a neoliberal theoretical framework that views democratic institutions as an additional layer of state administration to be overcome. Neoliberal thought is deeply skeptical in the capabilities of reason to infer or predict causality. Given the limitations of the mind, society should be governed, not by conscious modelling and careful planning, but according to spontaneous or “invisible hand” forms of social organization, which are the outcome of independent, unplanned individual decisions.

This position is most clearly expressed by Friedrich Hayek, who claimed that parliamentary sovereignty was in fact the “root of the evil” in modern society, since it facilitated the growth of the state. Legislatures constituted one limb of what Milton Friedman called the “iron triangle” of politicians, bureaucrats, as well as corporate and individual special interests that were perpetually reliant upon the government for rents, and therefore had an interest in obstructing market reforms.

‘Instant Democracy’ and the Rise of ‘Neoliberal Populism’

What should we make of Milei’s approach to Congress, then? Is it reflective of a new pattern in neoliberal governance, or merely the extension of an old one? The answer is both. While Milei’s approach clearly shares categorial similarities with the neoliberal legislative blueprint built for speed, his blending of these ideas with a coarse, populist rhetoric grounded in anti-statism, signifies an intensification of these patterns.

Milei’s populist neoliberal worldview contributes to a rising trend among far-right governments around the world to use this rhetoric to rationalize the subversion of democracy. This kind of “neoliberal populism” conflates democratic institutions with political actors, claiming that they are instruments of obstruction for self-serving politicians and bureaucrats.

This is a view Milei has proudly declared. “For me, the state is an enemy, as are the politicians who live off it,” he said. “We will put an end to the parasitic, stupid, useless political caste that is sinking this country.”

Grounded in the same logic as neoliberalism’s conventional demand for freedom from the state, democratic institutions increasingly appear as impediments to the logic of the marketplace. The elimination of cumbersome legislative processes, then, removes the obstacles that restrain market forces, generating popular economic independence, and restoring common-sense. This inverts the logic of democracy, making it appear as though executive rule is necessary to protect the interests of “the People” from Friedman’s “iron triangle.”

The anti-parliamentarism at the core of the neoliberal theoretical outlook has increasingly transformed into a populist program that mobilizes a general dissatisfaction with politicians against democratic institutions as such. Neoliberal politicians, such as Milei, use this reasoning to manufacture the conditions for the ongoing use of emergency powers and the concentration of authority in the executive branch.

The global elite, sensing “the smell of a big privatization wave coming,” are said to be “infatuated” with his take-no-prisoners approach to Congress. Thus, although not a new phenomenon, Milei’s brand of “instant democracy,” which conceives of speed and flexibility as the essence of legislative governance, has the support of both the financial elite as well as a growing populist dimension, giving it the hallmarks of a burgeoning political movement of the most regressive kind.

As the institutional forbearance that restrained most neoliberal governments to stay within the confines of liberal democratic constitutional structures continues to give way to a logic that sees the legislature as subordinate to the market, it is likely that we will continue to see the erosion of democratic standards.

Tom McDowell is a Lecturer in the Department of Politics and Public Administration at Toronto Metropolitan University. He is the author of Neoliberal Parliamentarism: The Decline of Parliament at the Ontario Legislature (University of Toronto Press, 2021).

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Content: Millie is facing the minefield of the economy, politics and society of Argentina
Argentina ’ s president-elect Javier Milley ’ s sweeping reform package overcame the first parliamentary hurdle, winning public approval on the third day of debate in the House of Representatives, while the initiative, which included economic, social and political areas, sparked strong protests from the opposition and the Argentine street.
Argentina has been embroiled in a long-running conflict with severe economic crises that have led its citizens to turn their attention to Mili, who won a resounding victory in last October ’ s election.
As a result of public discontent over decades of economic instability, with annual inflation surpassing the 200 percent threshold and poverty levels rising to 40 percent, Milley embarked on a “bold path to redefining Argentina ’ s future. ”
Massive opposition.
Tens of thousands took to the streets in defiance of Milley ’ s austerity measures, which included cuts to the balance sheet.
The demonstrations disrupted parliamentary debates, leading to confrontations between law enforcement forces and protesters.
Police fired rubber bullets and tear gas, and sprayed protesters with water cannons, with reports of injuries and arrests among protesters.
The leftist opposition withdrew from parliament, denouncing what it saw as a severe police crackdown on protesters.
Opposition MP Mariano del Canio told the AP that "we can't work this way", stressing that protesters should be heard before they return to the hearing after a period of suspension.
Parliamentary manoeuvres
In a strategic move to bolster his program, Milley secured IMF approval to disburse nearly $4.7 billion to Argentina.
The package of reforms, dubbed Omnibus, spans across different sectors, from electoral and cultural reforms to privatization, penal code amendments, and changes to the status of football clubs.
The House of Representatives, by 144 votes to 109, granted general approval, paving the way for the next phase of negotiations in the Senate.
The bill ’ s 664 clauses, which sum up the complex fabric of Melli ’ s reforms, will be subject to close scrutiny and possible amendments.
Although the House of Representatives has generally approved Melli ’ s reform bill, negotiations are on the horizon.
The complex details of the bill, which include economic, administrative, criminal and environmental areas, will be subject to strict scrutiny, according to a pro-plan parliamentary description.
Lawmakers, some of whom have expressed reservations about specific articles on privatizing state companies and delegating legislative powers to the president, are due to participate in detailed discussions.
Milley ’ s challenge is not just to overcome ideological differences, but to build consensus within a fragmented political landscape.
The upcoming recess will provide a break before crucial negotiations resume, marking a pivotal stage in Milley ’ s ambitious agenda for his program.
Millie's presidency is at a crossroads.
Milley ’ s presidency, marked by libertarian principles and capitalist ideals, faces the complex challenge of balancing economic liberalization with societal expectations.
Austerity measures and privatization plans were not without opposition, leading to protests and even a general strike.
The president ’ s swift measures, including a 50 percent devaluation of the peso, cuts in subsidies, and deep cuts in ministries, reflect his confrontational approach to tackling the government ’ s budget deficit and fighting inflation.
However, these actions have aroused resentment, as protesters have questioned the potential impact on the most vulnerable groups in society.
The course of Melli's reforms will shape the country's economic and social landscape.
Experts say that the fine line between government initiatives, parliamentary negotiations and street reactions highlights the multifaceted nature of Argentina ’ s current socio-political reality.
As Argentina grapples with historic economic challenges, observers expect Milley ’ s presidency to be a decisive chapter, with the split between economic liberalization and social welfare taking center stage with every decision that resonates in the corridors of power and crowded streets.
Source: Al Jazeera + Associated Press

Omnibus bill grants executive over 1,000 extraordinary powers until 31 Dec 2025, possible extension.

Bill targets privatization of 41 state‑owned companies in energy, aviation, ports, agriculture.

How many state-owned companies would be privatized under Milei's mega bill?

Bill offers 30‑year foreign investment incentive with tax breaks, no import tariffs.

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Content: Skip to Content

In initial victory for Argentine President Milei, Senate gives overall approval to key reform bills

By ISABEL DEBRE
Associated Press

BUENOS AIRES, Argentina (AP) — Argentina’s Senate has approved key state overhaul and tax bills proposed by President Javier Miliei, delivering an initial legislative victory to the libertarian leader in his efforts to deliver on his promises of radical change.

Senators voted 37 to 36 late Wednesday to give their overall approval to the overhaul bill after 11 hours of heated debate as protesters urging lawmakers to reject Milei’s harsh austerity clashed with police outside Congress. The lawmakers still must approve individual measures in an article-by-article vote that will stretch throughout the night.

In a reflection of the fierce backlash to the legislation and deep polarization gripping Argentina’s Congress, Vice President and head of the Senate Victoria Villarruel cast the tiebreaking vote in favor of Milei’s agenda.

The legislation delegates broad powers to the president in energy, pensions, security and other areas and includes several measures seen as controversial, including a generous incentive scheme for foreign investors, tax amnesty for those with undeclared assets and plans to privatize some of Argentina’s state-owned firms.

If the Senate approves the articles with modifications, the lower house still has to okay them before Milei can claim passing his first law since entering office last December.

As Senators pored over the bills, protesters in downtown Buenos Aires hurled sticks, stones and Molotov cocktails at police who fired water cannons and tear gas to disperse the crowds.

The fiery right-wing economist rose to power on promises he would resolve Argentina’s worst economic crisis in two decades, with annual inflation climbing toward 300% and a recession deepening.

But his political party of relative novices holds just a tiny minority of seats in Congress and he has struggled to strike deals with the opposition.

Senators approved two bills, a tax package that lowers the income tax threshold and a 238-article state reform bill that passed the lower house of Congress in late April after weeks of negotiations.

Initially dubbed the “omnibus bill” because of its more than 600 articles, the watered-down version at hand still delegates broad legislative powers to the president in energy, pensions, security and other areas.

The proposal’s immense scope — and staunch opposition to it — has limited progress.

“We have the weakest president we’ve ever seen who is trying to pass the biggest bill we’ve ever seen,” said Ana Iparraguirre, an Argentina-based analyst at Washington strategy firm GBAO. “That’s the contradiction.”

Unlike previous Argentine leaders since the return of democracy in 1983, Milei has failed to pass a single piece of legislation during his first six months in office. Instead, the populist outsider has relied on executive powers to slash state spending and sweep away economic restrictions.

“Today, it’s almost more important for Milei to demonstrate that he can pass laws in Congress than what he passes,” said Lucas Romero, director of Synopsis consultancy.

The package has faced tough resistance from the left-leaning Peronist movement loyal to former president Cristina Fernández de Kirchner, which has dominated Argentine politics for the last two decades and holds sway over the country’s powerful trade unions.

Thousands of bankers, teachers, truckers and workers from a range of other unions converged around Congress throughout the day, banging drums, blasting trumpets and chanting, “Our country is not for sale!” and “We will defend the state!”

“If this law passes, we are going to lose so many of our labor and pension rights,” said 54-year-old teacher Miriam Rajovitcher protesting alongside her colleagues, middle-class Argentines who say they’ve had to reconfigure their lives since Milei slashed their school budgets and devalued the currency, sending inflation soaring. “I am so much wor0se off.

The rally took a tense turn when hundreds of riot officers pushed back with their shields against angry protesters trying to surge through a barrier.

Police used pepper spray, water cannons and tear gas against the huge crowds while demonstrators set two overturned cars ablaze and threw Molotov cocktails.

Dozens of protesters were being treated by medics in the streets and police said 20 officers had been injured in the clashes. At least five Peronist lawmakers said they were hospitalized after police sprayed pepper spray in their eyes.

“Today the government is declaring war on the Argentine people,” Peronist lawmaker Cecilia Moreau told reporters outside Congress.

The presidency called protesters “terrorists” and accused them of “attempting to carry out a coup d’état” by disrupting Congress.

The Peronist bloc controls 33 out of 72 seats in the Senate while Milei’s party, Freedom Advances, holds just seven seats. The bill needed 37 votes from the 72 total legislators in the Senate to get a majority and ended up with a 36-36 tie.

Analysts say that foreign investors and the International Monetary Fund, to which Argentina owes a staggering $44 billion, are closely watching Wednesday’s vote to see whether Milei can build consensus with his opponents to deliver on his ambitions.

Wednesday’s article-by-article vote will stretch for hours, with analysts expecting lawmakers to further weaken the most divisive sections of the bills.

One of the most contested measures is an incentive program to spur foreign investments that offers lucrative tax breaks for 30 years, no import tariffs and other perks for big corporations that critics say go too far.

“What this law is hurting most are the pockets of workers, not the big companies that are just going to get richer,” said 36-year-old Juan Barreto, a bank employee jostling amid crowds of his fellow union members.

Argentina’s unions have also voiced vehement opposition to measures that would make it easier for companies to fire employees as well as plans to privatize some state-owned companies. The question of which ones will head to auction has generated intense debate.

Backlash to the tax bill has centered on an amnesty that would allow Argentines to register undeclared assets at home and abroad without paying heavy taxes, as well as a lower income tax threshold to boost revenue.

Frustrated by legislative resistance, the president has moderated his previous all-or-nothing approach. Earlier this month, in a bid to break the impasse, Milei fired his politically inexperienced Cabinet chief and replaced him with Interior Minister Guillermo Francos, a career politician skilled at congressional wheeling and dealing.

In recent weeks, Argentina has gotten a taste of what awaits if Congress fails to pass the bills.

Sovereign bonds have tumbled. The country’s currency, the peso, has depreciated as well, widening the gap between the official and black market exchange rate to nearly 40%. The peso was trading at 1,255 per greenback on the informal market Wednesday, a rate far lower than earlier this year.

Even as the IMF has praised Milei’s agenda and released tranches of frozen loans, the fund has held back from striking a new deal with Argentina.

Meanwhile, Milei has been in Silicon Valley rubbing shoulders with billionaire tech executives Elon Musk, Tim Cook and Mark Zuckerberg. The meetings however, have not produced any announcements of substantial investments.

“What you’re seeing in the last three weeks is the market and investors getting a little nervous,” said Marcelo J. García, Americas director at geopolitical risk firm Horizon Engage. “The market is saying, ‘Show me that you can govern.’”

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Labor reforms extend probation, reduce protections, curtail right to strike.

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Content: Streets of Argentina Ablaze with Dissent as Milei’s Controversial Reforms Ignite Outrage

In a stunning turn of events, Argentina has become a battleground for public discontent following President Javier Milei’s introduction of a series of controversial proposals. Thousands of Argentinians have taken to the streets, enraged by the president’s push for drastic cuts to public spending.

Milei’s latest measures, unveiled on Wednesday evening, aim to revolutionize Argentina’s struggling economy through a variety of initiatives. These include deregulating the government and opening up state-run industries for privatization in order to spur both exports and investment.

However, the people’s outrage has manifested in widespread protests, often met with a heavy police presence. Gathering in front of the Argentine Congress, hundreds of demonstrators made their opposition to Milei’s proposals known.

Undeterred by the dissent, Milei appeared on national television to defend his agenda and offer reassurances of a prosperous future. He asserted, “Our objective is to rebuild our nation, restore individual freedom and autonomy, and dismantle the myriad of regulations that have impeded our economic growth for far too long.”

Acknowledging the mounting protests, Milei’s security minister, Patricia Bullrich, announced new measures aimed at maintaining public order. These measures grant federal forces the power to disperse protesters blocking streets without requiring a judicial order, and authorize the police to use video or digital evidence to identify and hold accountable those obstructing public thoroughfares. Moreover, the legislation empowers the state to apportion the costs of mobilizing security forces to the protesters themselves.

Milei’s presidential victory was built upon a campaign centered around reducing public spending. Since assuming office, he has already made significant changes to the country’s financial landscape. The value of the Argentinian currency has been adjusted, contracts of public employees with less than one year of service have been terminated, and the prices of basic services and public transportation have seen notable increases.

FAQ:

Q: What are President Milei’s proposals?

A: President Milei’s proposals include deregulating the government and allowing the privatization of state-run industries to boost exports and investment.

Q: Why are Argentinians protesting?

A: Thousands of Argentinians are protesting against Milei’s proposals due to their belief that the drastic cuts to public spending will adversely impact their lives.

Q: How is the government responding to the protests?

A: In response to the protests, the government has announced new measures to maintain public order, empowering federal forces to disperse protesters without a judicial order and enabling the identification of those obstructing public thoroughfares through video or digital means.

Q: What changes has Milei already implemented?

A: Since taking office, Milei has adjusted the value of the Argentinian currency, terminated contracts of public employees with less than one year of service, and increased the prices of basic services and public transportation.

(Sources: Information gathered from local news outlets)

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Content: Argentina's President Saves Economy, 5,000 Government Employees Don't Continue Inflation, People Crash
International Center Tsai Sha-ling / General Report
Javier Milei, a far-right liberal economist known as “Trump Argentina, ” announced a“ shock therapy ” after his election as Argentina ’ s president to rescue a serious economic crisis with drastic fiscal reforms, insisting that it is normal for things to get worse until concrete results are achieved, calling on people to survive the inflationary boom, and adding to a series of reforms, including the layoffs of more than 5,000 government posts, means that Thousands of government employees will not be rehired.
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Speaking to supporters, Mirei declared that he was “unwinding the suffocating web of government control ” and changing a large number of regulations that are hindering economic growth, stressing:“ We have no choice, no time, no room for meaningless discussion. ”
Our country needs to take immediate action, "he said.
In order to reduce government spending, Mirei announced that he will not renew the contracts of government employees hired before he takes office in 2023, and that he will be sworn in as president on December 10 this year; employees hired before 2023 will not be affected for the time being, but the related contracts will also be reviewed.
The report pointed out that the 2023 as the demarcation point, apparently in response to the former president's proposed salary increase in the last year of his term.
With inflation expected to reach 200% by the end of the year, Mirei intends to accelerate measures, including privatization of state-owned companies, in the hope of boosting exports and investment, easing labor laws, reducing protections for employees, making it easier for companies to lay off workers, and banning state intervention in the rental housing market.
In addition, energy and transportation subsidies will also be cut, and some government departments will be abolished.
Whether Mirey ’ s shock therapy will save the economy is still unknown, but people have taken to the streets to protest against soaring prices.
Some economists believe that although such measures may be necessary to solve Argentina ’ s long-term financial problems, without an adequate safety net, the poorest people in society may struggle to survive and may not be able to survive until the country ’ s economy returns to normal.
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Content: Global Economic News
Millie's attempts to liberalize Argentina's economy
366 rules changed, including privatization, housing and work
Demonstration in Argentina against the decree of President Javier Milli.
"E.B.A."
Last week, Argentina ’ s libertarian president, Javier Milley, issued a sweeping decree to change or abolish 366 economic rules in a country accustomed to heavy government intervention in the market.
The move is the first of its kind in Argentina ’ s history, as none of its democratically elected presidents has attempted such a massive dismantling of the system.
That ’ s exactly what Milley promised during his election campaign, waving a chainsaw to symbolize his attempt to cut public spending as Argentina struggles with three-figure inflation after decades of fiscal mismanagement.
However, according to Argentine law, Congress still has the power to flood Melli ’ s program.
Change of daily life
Ten days after taking office, and on the eve of the holidays, Milley presented his "necessary and urgent" decree to loosen some of the rules governing the country's economy, where annual inflation has reached 160 percent.
One big change will be the removal of all restrictions between tenant and landlord, such as laws on increasing rents.
In recent years, landlords have increasingly priced their properties in dollars to avoid falling into the rental income trap that has long been overtaken by rising inflation.
This was a nightmare for tenants in a country where access to the dollar was tightly controlled.
Melli ’ s plan also loosened labor laws, increasing the probation period for new employees from three to eight months.
Compensation for Groundless Dismissal Laws have been amended in the interest of companies, and plans are being made to renegotiate labor agreements in force since 1975.
He also lifted export restrictions and said the internet market would be liberalized.
Milley also abandoned rules preventing the privatization of government institutions, already setting his sights on the national airline and the oil company.
He also moved to limit the right to strike enshrined in the constitution.
Purpose of the decree
Milley, a figure whose rise to the country ’ s highest office surprised most observers, blames the interventionist and protectionist policies of previous governments for stifling the economy.
Before the decree was announced, the new government had already devalued the Argentine peso by more than 50 percent and announced massive cuts in generous government subsidies for fuel and transportation starting in January.
“The goal is to begin the process of rebuilding the country, restoring the freedom and independence of individuals and beginning to dismantle the vast amount of systems that have halted and hindered economic growth, ” Milley said.
One protester said: "There may be people with Stockholm syndrome.
They are fascinated by a model that impoverishes them. ”
The opposition, who was recently ousted from the government, criticized Milley for the decree, seeing it as a way to overcome his lack of a majority in Congress.
Miley Libertad Avanza, who is only two years old, has only 40 of the 257 seats in the House of Representatives and seven of the 72 seats in the Senate.
German Martinez, speaker of the parliament of the Peronist coalition, said: "Uniting for the homeland is not the right way.
They sent the reforms as bills.
“Don ’ t be afraid of democratic debate. ”
Constitutional lawyer Emiliano Vitaliani said the country's highest laws state that "in principle laws cannot be amended by decree and the president cannot replace Congress."
Political scientist Lara Guiboro said the resolution "crosses all boundaries and rules out many issues that need political agreements from Congress and the provinces."
Vitalini said the decree could be revoked if it was rejected by both houses of Congress.
Otherwise it will come into force on December 29.
Constitutional lawyer Alejandro Carrillo said in an article in the Lanacion newspaper that "the president has made a very big bet, and his success will depend on his ability to obtain legislative support that is not yet known."
It comes at a time when Argentina is stuck in the grip of an economic crisis with the highest inflation in 30 years.
Cecilia Rojas is searching every store in the vast city of Buenos Aires to find affordable gifts for her children for what is expected to be a bleak Christmas day this year as Argentina faces its worst economic crisis in decades.
Rojas, 47, said: “Before, I used to buy from a well-known toy chain, but now I ’ m looking at smaller stores nearby to find a better price.
Rojas, a psychologist, has two sons, one aged 17 and the other eight.
This year, they will each receive one gift, knowing that they have received many gifts in previous years. ”
Argentina ends the year with the highest inflation rate in the past 30 years, over 160 percent year-on-year.
The 50 percent devaluation of the peso, approved by the government of liberal President Javier Milley on Dec. 12 two days after taking office, has led to a new price spike in a country where more than 40 percent of the population is poor.
Games prices have risen by 110 to 230 percent this year, according to figures from the Argentine Chamber of Gaming Industry.
Thus, shoppers on Christmas Day should be patient and seasoned.
Ogostina Jago, a 23-year-old mother of four, said: "If you walk a little, you can find the same product in different stores at different prices."
"This year, we will buy him a gift thanks to the help we get from grandmothers and fortunately, there are many of them."
The country is also under the brunt of the radical measures of President Javier Mille ’ s new government, which has issued hundreds of decrees to revive the ailing economy.
Milley, who has pledged to cut government spending, also announced deep cuts in subsidies on fuel and the transport sector starting in January.
His government also scrapped a programme to control the prices of some goods introduced by the previous government to try to soften the impact of inflation.
Milley warned that the country was on the brink of hyperinflation and that things would get worse before they began to improve.
Alexandra Mazi, a 49-year-old schoolteacher who took part in a protest against the new measures, said: “They are starving people, using policies that have been applied in the past and have not worked, and all they are doing is impoverishing the working class. ”
Milley ’ s government has forced organizers of its first protest to pay tens of thousands of dollars to cover the cost of deploying security forces to protect it.
Euronews reported that thousands of people took part in a demonstration on Wednesday against Milley ’ s austerity measures and to commemorate the bloody 2001 protests that followed the country ’ s economic collapse.
Government spokesman Manuel Adorney said the cost of the massive deployment of police and riot police was 60 million pesos ($73,000 at the official exchange rate).
“The bill will be sent to social movements ” as they“ bear responsibility for the cost that should not be borne by citizens, ” he said.
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How will Milei's reforms impact workers?

How will Milei's reforms impact workers?

How will Milei's reforms impact workers?

Milei cut energy subsidies, removed price controls, devalued peso, causing high inflation.

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Content: Argentina's inflation edges up in June, breaking monthslong streak in blow to President Milei

A closely watched measure of inflation in Argentina remained stronger than the libertarian government of President Javier Milei would have hoped

ByISABEL DEBRE Associated Press
July 12, 2024, 5:29 PM

BUENOS AIRES, Argentina -- A closely watched measure of inflation in Argentina remained stronger than the libertarian government of President Javier Milei would have hoped on Friday, as the official statistics agency reported prices edging up in June and breaking a monthslong streak of declines.

Argentina's consumer price index rose 4.6% in June, slightly up from the rate of 4.2% in May, ending a five-month trend of cooling inflation that experts had attributed to a deepening recession brought about by Milei's brutal austerity scheme. President Milei has touted the falling prices over recent months as a key victory in his fight against Argentina’s worst economic crisis in over two decades.

When Milei became president last December, monthly inflation was peaking at 25%. But the price drop since hasn't offered much relief to ordinary Argentines as Milei presses on with a harsh austerity program that involves slashing generous energy subsidies, scrapping price controls and devaluing the Argentine peso.

Friday’s government report showed Argentina’s annual inflation slowing a bit to just over 271% — still among the highest rates in the world.

Surging electricity and gas prices accounted for most of June's inflationary spike, the statistics agency said. Argentines have reported eye-watering utility bills after years of paying highly subsidized rates under left-leaning governments.

In stark contrast to Milei's program, those past Peronist administrations fixed prices and printed billions of dollars’ worth of pesos to fund a large deficit — fueling chronically high inflation.

Under Milei, Argentina's energy ministry last month reported that low-income households that previously paid just 5% of the real cost of electricity have started paying a third of it while middle-income households now cover at least half following Milei's removal of subsidies. The government has also capped electricity consumption to qualify for subsidies, squeezing families as a cold front sweeps Argentina during the Southern Hemisphere’s winter.

The country's cost of living has surged nearly 80% in the first five months of 2024 compared to the same period last year, the report also showed. Prices in Buenos Aires shops and restaurants have reached levels comparable to the U.S. even as public salaries and pensions have been held down.

In further worrisome news for Milei, the peso on Friday fell to another record low against the dollar, hitting 1,500 on the black market after months of stability.

The steep fall in Argentina’s currency means the gap between the black market rate and the official exchange rate, currently 919 pesos to the dollar, has widened to over 50%. That complicates Milei's goal of eventually lifting Argentina's strict currency controls to restore investor confidence.

Milei's government wants the International Monetary Fund — to which Argentina already owes a staggering $44 billion — to step in with a new loan to support his plans to remove capital controls.

But as uncertainty remains over the future of Milei's economic program, the IMF dampened expectations of a new deal on Thursday.

“The staff will engage in discussions on a possible new arrangement as we would with any IMF member," the fund's spokesperson, Julie Kozack, told reporters Thursday. "At this stage, there is no specific timeline for those discussions.”

Devalued the peso
cut transport and energy subsidies

Devalued the peso
cut transport and energy subsidies

Milei achieved fiscal surplus two months and cut inflation from 25.5% to 11% by March.

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Content: Argentine government announces first quarterly surplus since 2008

Javier Milei celebrated the accomplishment, which achieved via a substantial reduction in government spending, including reductions in public works and redistribution to regional governments.

The Argentine government, led by President Javier Milei, announced Monday that it closed the first quarter with a fiscal surplus for the first time since 2008.

Milei broke the news on national television with marked joy. This fiscal surplus of 0.2% of GDP occurs after the first three months under the Libertarian president and his "chainsaw" method against public spending. Since coming to power, as he promised during the campaign, Milei has carried out a policy of heavy cuts to state infrastructure.

“This economic miracle of achieving a quarterly financial surplus after almost 20 years, having inherited the situation that we did, responds to what those who want the failure of this government usually say, to an enormous extent to what we called a 'chainsaw' during the campaign, and not as some say to the liquefaction of public funds, a method that has historically been used in our country," celebrated Milei from the Casa Rosada in Buenos Aires, the president's official residence. “The fiscal surplus is the cornerstone from which we will build Argentina's new era of prosperity,” he added, standing alongside several members of his government.

The fiscal surplus of 0.2% for Argentina represents about $300,000. The accomplishment comes after cuts of almost 75% of state transfers to regional governments in Argentina, as well as halting 90% of public works, and the popular policy of reducing the number of public ministries from 18, as under the previous government, to only nine. Argentine bonds increased in value shortly after the president's announcement.

For Milei, the reduction of public spending and of the large deficit was an obligatory step in his objective of restructuring the Argentine state. The president assured that public deficits cause inflation, his arch nemesis, which in 2023 in Argentina was the highest in the Americas, reaching 211.4% at the end of Alberto Fernández's presidency.

What economic issue did Milei want to address?

What economic issue did Milei want to address?

Milei relocated embassy to Jerusalem, refuses left‑leaning regimes, aligns with US‑Israel axis.

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Milei secured $4.7bn IMF loan to support reforms.

What issue did Milei want to address without printing money?

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Milei's reforms face opposition from civil servants, unions, IMF creditors, risk social unrest.

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Will Javier Milei Be Able To Blame Economy Minister ‘Toto’ Caputo Once The Going Gets Tough?

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Paradoxically, the word that appears to define Argentina’s (and the world’s) first ultra-libertarian president is pragmatism. Initially seen as a positive characteristic allowing the economist to shake off some of the fringe characters and ideas that made up his La Libertad Avanza coalition, Milei’s pragmatism could also lead to negative outcomes if his plans don’t work out.

The economist-president was smart in creating an electoral alliance with Mauricio Macri and Patricia Bullrich, along with PRO party hardliners, and later moved strategically to show independence from the former president to avoid being portrayed as a puppet, like his predecessor. He gave Bullrich the Security and Defence Ministries, minimizing Vice-President Victoria Villaruel’s power and therefore her dictatorship-denying influence, particularly over the security forces. He also sealed a deal with Luis ‘Toto’ Caputo – a leading economic figure from the Macri’s 2015-2019 administration – behind the ex-president’s back, apparently distancing himself from certain extreme measures proposed during the campaign such as dollarization and torching the Central Bank —where the economy minister’s business partner Santiago Bausili at financial consultancy Anker Latinoamerica has taken the reins.

While Caputo had fallen into disrepute, his recycling by Milei didn’t spook the markets initially, or certain sectors of society and the media that appear to have already aligned themselves with Milei. As the nascent administration begins to put its “chainsaw” austerity plan in motion, society will begin to feel the pain of the extreme measures and its tolerance will be tested, as will Milei’s and his team, at the center of which once again sits ‘Toto’ Caputo.

Toto was the first to face the music and lay out an economic plan for the Milei administration, even before the president who mustered the courage only when he announced the DNU emergency decree that came before the Omnibus law. During the first announcement, Caputo sought to deliver a didactic message that made clear the weight of the situation left behind by the Fernández-Fernández administration (“la herencia”). He looked uncomfortable, just as he did during his previous public service posts where he avoided the media and is said to have left the government suffering from panic attacks. His decision to take the “electric chair” ministry remains bewildering. The minister announced a series of measures aimed at achieving a fiscal surplus in their first year in office including aggressive budget cuts and tax hikes.

Caputo’s announcement represented the first time that Milei’s plans were laid out in any sort of detail beyond a declaration of intentions. While in line with the campaign promise of reducing the state’s obligations by more than five percent, the severity of the devaluation of the official peso-dollar exchange rate (120 percent taking it to 800 pesos) and the rest of the measures has set off alarms. Most prices have risen aggressively over the last several weeks, particularly gasoline and food, indicating inflation will spike and could persist. The December reading already hit 25.5 percent, and many expect similar numbers for January. At the same time, it is becoming apparent that forcing the “caste” to absorb the totality of the austerity plan is logically contradictory, as it inevitably affects the everyday citizen which is evident in subsidy reductions and cuts in social spending. Milei had promised he’d rather amputate his arm than raise taxes, but he’s raised export duties and the PAIS tax which pushes the value of the dollar even higher for certain transactions.

The ‘caputazo’ (as the plan is being jokingly called) replaced pure austerity with a mix of higher taxes together with spending cuts and the “dilution” of part of the deficit through high inflation. The next few months will see runaway inflation run even farther away and put intense pressure on the population, as wages and salaries fall even farther behind. Milei had warned that we would have to suffer on our way to libertarian utopia. Leftist social movements and unions have already begun to mobilize against the government, including a general strike at the hands of the General Confederation of Labor. Given Bullrich's hardline predisposition, these were peaceful marches. Will they remain so in a few months if the middle class joins in, desperate to make ends meet?

Once again, the question of Milei’s pragmatism will be front and center. Assuming the impact of his economic plan is as painful as it seems, the level of social conflict will likely rise dramatically. At the same time, he needs to continue to negotiate legislative support for his ambitious reform package, which initially seems to rest on the possibility of an “anti-Peronist” front as seen in the Senate first and at the commission level in the Chamber of Deputies later. How much will society accept that it voted Milei for an orthodox austerity plan that directly hits its purchasing-power? Will the charismatic libertarian be able to retain public support, or convince his voters that excruciating pain is a necessary condition for economic redemption? How long will Caputo resist this time? And if the plan doesn’t work, how much of the blame will Milei be able to pin on the financial trader?

At this point, we have many more questions than answers.

This piece was originally published in the Buenos Aires Times, Argentina's only English-language newspaper.

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How will Milei's reforms impact workers?

Who has opposed Milei's proposed layoff order?

How will Milei's reforms impact workers?

Who has opposed Milei's proposed layoff order?

How will Milei's reforms impact workers?

Who has opposed Milei's proposed layoff order?