Milei took office pledging deregulation, privatization, and fiscal consolidation to overhaul Argentina’s inflation-hit, high-poverty economy.

He launched “shock therapy” amid high inflation, recession risk, and over 40% poverty to reverse state-led mismanagement.

A decree enabled privatizing up to 41 state firms and granted about 1,000 extraordinary executive powers until 2025.

It also loosened labor rules, lifted export curbs, liberalized the internet, and limited strike rights.

The government devalued the peso 54%, unified the rate at 800 pesos per dollar, and scrapped price controls.

Energy and transport subsidies were slashed with plans to phase them out, and ministries were cut to curb spending.

The administration targets a 2024 primary balance via a 5%-of-GDP fiscal adjustment to halt money printing and inflation.

With a minority, it has relied on allies and the vice president’s tie-breaking vote to advance its agenda.

The Senate rejected a deregulatory decree, underscoring legislative checks on executive action.

Decrees and legal changes target labor institutions, curbing union power and reducing worker protections.

Milei advocates dollarization and abolishing the central bank to stabilize the economy.

Argentina posted its first quarterly surplus since 2008, driven by spending cuts and reduced transfers to provinces.

Austerity and devaluation spiked electricity and gas prices, raised living costs, and pushed record-low peso values in parallel markets.

The IMF approved a $4.7 billion disbursement to back the stabilization plan.

Price spikes, subsidy cuts, and job losses have fueled protests, strikes, and clashes with security forces.

Child and adolescent poverty is projected to worsen, with 70% in poverty and 34% in extreme poverty by 2024.

Milei warns of a $100 billion “debt bomb” and the need for IMF backing to roll over Argentina’s $44 billion program.

IMF support comes with conditions for fiscal consolidation and macro reforms.

Milei took office pledging deregulation, privatization, and fiscal consolidation to overhaul Argentina’s inflation-hit, high-poverty economy.

Title:

Content: More than 300 economic reform measures in Argentina rebounded, new president ignored: urged Congress to speed up deliberation
Written by external sources (international)
Published: Updated:
After becoming president of Argentina, Javier Milei, known as the “Trump of Argentina, ” launched a“ shock therapy ” and issued an economic decree with more than 300 reforms, including privatization of state-owned enterprises, an end to export restrictions and deregulation.
According to the US media "New York Times", Reuters and other foreign media reported on December 23, Argentina's national inflation has accelerated rapidly in the past two weeks, and more than a dozen provinces have declared a state of economic emergency.
In recent days, people across Argentina have taken to the streets to show their dissatisfaction with the Mirai government.
However, Millet remained unmoved and called for a special session of parliament to speed up the implementation of the reform policy.
“High inflation has become synonymous with Argentina, and people are used to rising prices.
But after Millet took office, people ’ s lives became more painful. ”
The New York Times reported on the 23rd that in the past two weeks since Millet became president, prices in Argentina have soared at a dazzling rate.
The owner of a bar in the Argentine capital Buenos Aires has seen the price of beef soar by 73% and the price of cucumber by 140%; a Uber driver says she now pays 60% more for filling the tank; and a father says he pays twice as much for diapers as he did last month.
The report quoted government data as saying that the price of gasoline has recently soared by 60%.
There are also analysts who predict that Argentine house prices will rise another 25% to 30% in the near future; from now until February next year, house prices will continue to rise 80%.
Argentine President Javier Milei announces economic measures in a televised speech in Buenos Aires on December 20, 2023.
This is a screenshot of a video released by the Argentine government.
(ARGENTINE GOVERNMENT TV / via REUTERS TV / Handout via REUTERS)
“We ’ ve been worried since Milai won, ” said Fernando Galli, 36, who was pessimistic about the situation.
He is a high school philosophy teacher in Buenos Aires and is raising two young daughters (one 6 years old and one 18 months old).
The New York Times said that most Argentines are struggling to figure out how to make ends meet, and every time they buy necessities, it is like taking a complicated economics course.
As President, Argentina is in the midst of a severe economic crisis, with a cumulative inflation rate of 142.7% and a poverty rate of more than 40% over the past 12 months.
Argentina is also facing a debt crisis, with more than $44 billion owed to the International Monetary Fund.
Since this year, Argentina ’ s inflation rate has peaked at 8.4% in April, and some experts predict that Argentina ’ s gross domestic product will shrink by 3.1% this year and another 0.2% in 2024.
During his presidential campaign, Millet made "astonishing remarks" and proposed a number of "surprising" policy proposals. He promised to cut the central government departments from 18 to 8 and cut them to 9 on his first day in office, and quickly fulfilled this campaign promise.
In addition, he has promised to adopt so-called “economic shock therapy, ” advocating the“ burning up ” of poorly managed central banks, abolishing the peso, shifting to “dollarization ” across the board, slashing spending, allowing open carry of firearms, legalizing organ trade, and restricting abortion.
Milley himself issued an early warning.
At his inauguration ceremony on Dec. 10, Mr. Millet said publicly that he would reduce the size of government and rebuild the economy, something that would hurt at first, but “I would rather tell people the uncomfortable truth than the comfortable lies. ”
In Buenos Aires, Argentina, on December 21, 2023, demonstrators protest against the new policies of Argentina ’ s new president, Mirai, outside the parliament building. (Reuters)
Two days after taking office (12), Millet began to engage in "shock therapy", taking a series of measures, including cutting government spending, reducing consumer subsidies, and stopping tenders for new public works, in an attempt to reduce the fiscal deficit and control inflation.
Argentina ’ s economy minister announced on the same day that the new government lowered the official exchange rate to 800 pesos per US dollar, a 54% devaluation.
On December 20, Millet signed an emergency economic decree announcing more than 300 reforms, including the privatization of state-owned enterprises, the end of export restrictions and the relaxation of regulations, in order to achieve the "liberalization" of the Argentine economy.
The New York Times quoted economists as saying that although Millet's measures are necessary to solve Argentina's long-term financial problems, they also cause short-term pain.
At the same time, some analysts question the lack of safeguards for the poorest people in Argentina.
One Argentinian put it bluntly: “It is impossible for people ’ s wages or incomes to adapt to this rate of inflation. ”
Thousands of people, led by representatives of the unemployed, took to the streets of Buenos Aires on Monday to stage the first mass protest since the Mirai government came to power against the new government ’ s “economic shock therapy ” and austerity policies, demanding more support for the poor.
Demonstrators hold flares outside the parliament building in Buenos Aires, Argentina, on December 21, 2023, to protest against the new policies announced by Argentina ’ s new president, Miguel Millay. (Reuters)
In the face of public dissatisfaction, the Milai government did not move.
On the day of the protests, the Argentine government deployed a large number of police to stop protesters from blocking roads.
The Millet government has also threatened to take tough action against any group of organisations trying to thwart its plans through disruptive protests, and those blocking roads could lose their right to state benefits.
Manuel Adorni, a spokesman for Millet, also responded that higher inflation is an inevitable process to repair Argentina ’ s “distorted economy. ”
"There are many difficult and unresolved problems in Argentina, and we have to start solving them," he said.
We will inevitably experience months of high inflation, "he said.
On the evening of the 22nd local time, Millet said that he had submitted the law to the Argentine parliament on the same day, and called on the parliament to convene a special session between December 26 and January 31 to discuss the relevant issues.
Reported that the current parliament is in recess, the next meeting is scheduled for March next year.
This article is authorized by the Observer Network

What economic issue did Milei want to address?

He launched “shock therapy” amid high inflation, recession risk, and over 40% poverty to reverse state-led mismanagement.

Title:

Content: Why did Argentina give up on joining the BRICS?
You don't have to be too serious about the new president, Millet.
Author: Ye Dehao
Published: Updated:
December 29 is the last government working day in 2023.
The Argentine government issued a letter to the BRICS countries as early as the 22nd, indicating that Argentina is not suitable for joining the BRICS at present, saying that its foreign policy is very different from the previous government.
Argentina ’ s new president, Javier Milei, a far-right liberal who was sworn into office on December 10, has been highly pro-American and pro-Israel, and his formal decision to forgo joining the Golden Brick, which is seen as close to China, comes as no surprise.
Negotiations are fruitless?
After Millet ’ s victory in the second round of voting at the end of November, Chinese Ambassador to Argentina Wang Wei quickly met with then-Foreign Minister Diana Mondino, and Millet himself released a Spanish translation of a personal letter sent to him by Chinese President Xi Jinping, thanking Xi Jinping for holding up a letter of “common interest ” between China and Argentina.
Although Millet, who had indicated during the election that he would not talk to communist countries (for Millet during the election campaign, this included China and Brazil), expressed goodwill, the foreign minister said publicly on social media in early December that he would not join the BRICS.
Subsequently, at the invitation of Argentina, China sent special envoy of President Xi Jinping and Vice Chairman of the Standing Committee of the National People ’ s Congress Wu Weihua to Buenos Aires to attend the inauguration ceremony of Milai on December 10, and met with Milai with Wang Wei the following day.
Mirai later wrote back to China, which Argentine media said contained references to a currency swap agreement between China and Argentina, when one of Argentina ’ s loans to the International Monetary Fund (IMF) was due to be repaid.
Later, Chinese officials also met with Milay ’ s nominee for governor of Argentina ’ s central bank (although Milay had stated during his campaign that the central bank would be abolished and fully dollarized), as well as his economy minister, Luis Caputo.
Ukrainian President Leonid Zelensky also attended the inauguration ceremony of Millet.
(Reuters)
In the end, there seems to be no progress on the currency swap agreement and the related issues of joining the BRICS.
By December 14, Reuters had reported that Milay had reached a loan agreement with the Development Bank of Latin America and the Caribbean (CAF), allowing Argentina to repay the IMF as scheduled on December 21.
On December 19, Argentine media revealed that China had suspended the currency swap agreement with Argentina, saying that Beijing had recalled Wang Wei to Beijing the previous day.
The letter from Argentina renouncing its accession to the BRICS came on the 22nd.
Argentina ’ s renunciation of BRICS membership has been widely interpreted as a setback for China ’ s efforts to “expand ” solidarity with the global South at the BRICS summit in South Africa in August 2023.
At that time, the BRICS decided to invite the United Arab Emirates, Saudi Arabia, Iran, Argentina, Egypt, and Ethiopia to join the BRICS.
However, to put it another way, Millet ’ s renunciation of joining the Golden Brick was just an act of symbolic significance greater than practical significance, and his attitude toward China and even his right-wing libertarian stance have weakened significantly since his election.
Foreign Minister Guido Mondino has made it clear that he will not abandon diplomacy with China and Brazil (Argentina ’ s first and second largest trading partners, respectively).
Millet has quickly appointed a new ambassador to China, and his letter to the BRICS states that he hopes to deepen bilateral relations and increase trade and investment contacts with other countries, and hopes to meet with the leaders of the BRICS countries.
On December 10, Millet addressed supporters after he was sworn in as president. (Reuters)
During the campaign, there were fears that Millet would behave badly when he came to power.
However, the majority of those who were elected were on the right wing.
For example, Economy Minister Caputo is a member of former President Mauricio Macri ’ s Juntos por el Cambio party, and Central Bank governor Santiago Bausili was Finance Minister from 2015 to 2019.
The Adventures of Shock Therapy
Of course, after coming to power, Millet quickly pushed for “shock therapy ” economic reforms, immediately devalued the Argentine peso by half (but its exchange rate remained below the black market), and declared a two-year economic emergency, proposing more than 300 measures in the form of presidential decrees, from loosening controls on food retailers to loosening the use of foreign exchange, from privatization of state-owned enterprises to deregulation of proprietary medicines, from labor protection to employee restrictions. All strikes are complete.
Unions in Argentina have mobilized a revolt, but the scale of the demonstrations has not reached enough to worry Millet.
Security officials from the Milai authorities also issued a stern warning against the demonstrations, which seemed to have a degree of deterrent effect.
On December 29, the economic emergency in Milai came into effect, with demonstrators gathering in the streets of Buenos Aires to protest against economic reforms.
(Reuters)
At the end of the year, Millet also sent more than 600 reform bills to Congress, asking Congress to initiate a special session from December 26 to January 31 to help Argentina move forward quickly with reforms.
The bill includes legalizing Millet ’ s previously declared economic emergency, abolishing the primary election system, increasing penalties for various protest-related crimes, protecting the right to self-defense and strengthening the police, listing state-owned enterprises that can be privatized, allowing the legalization of undeclared property, modifying policies related to the oil industry (such as the government will not impose price limits), and temporarily handing the president more legislative powers on taxes, pensions, security, and other items.
Millay ’ s government says it wants to reduce the government deficit to zero by 2024 (which would have been about 5% of GDP), thereby drastically reducing the size of the government, cutting subsidies for electricity and transportation, cutting funding to local governments, and temporarily raising import taxes and increasing benefits such as the value of food cards to help those most in need.
With only 40 of the 257 seats in the Brazilian Chamber of Deputies and 7 of the 72 seats in the Senate, Millet ’ s party, even with less than half of the traditional right-wing “working together to change ” support, is hoping to use popular opinion to put pressure on Congress to show that if Congress is unwilling to pass his reform bill, it will resort to the law (no law). Binding) referendum.
[Here: Chainsaws are a symbol of Millet ’ s reformist economy, and he often picks them up to campaign events.]
Millet ’ s “crazy ” economic reforms, and the voters ’ support for him, are understandable. After all, Argentina ’ s economy has been a tragedy for more than a century, and its per capita GDP was higher than that of Germany and France 100 years ago, but it is now several times behind them, from advanced countries to developing countries.
According to statistics, its ratio of negative growth to positive growth has been worse than that of war-torn Iraq and Sudan since 1950, and it is now the largest recipient of IMF assistance since its inception.
Not to mention that Argentina has an inflation rate of more than 100%.
Millet has long shown that his shock therapy will bring economic pain, but voters have limited tolerance for the pain, and the pain is likely to grow.
The street demonstrations are not threatening Millet at this point, but if Millet ’ s new deal doesn ’ t work, the situation will be very different in a few months.
In the midst of a crisis-ridden march of economic reform, Millet ’ s foreign policy will remain at the symbolic level, and will never dare to do anything that will really negatively affect the Argentine economy.
Giving up on joining the Brick is just one example.
We don ’ t have to read this diplomatically too seriously — it ’ s just the political norm in Latin America, where the ideologies of the right and the left are fiercely opposed.

What economic issue did Milei want to address?

A decree enabled privatizing up to 41 state firms and granted about 1,000 extraordinary executive powers until 2025.

Title:

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).

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

It also loosened labor rules, lifted export curbs, liberalized the internet, and limited strike rights.

Title:

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.
Publish it.
More Economic News - Global

How will Milei's reforms impact workers?

The government devalued the peso 54%, unified the rate at 800 pesos per dollar, and scrapped price controls.

Energy and transport subsidies were slashed with plans to phase them out, and ministries were cut to curb spending.

Title:

Content: December 28, 14: 30
Opinions
“No money ”: the new President of Argentina introduced the first economic reforms
Elena Kondratieva about the shock measures of Javier Miley in a country with 40% poverty
President of Argentina Javier Miley
Argentina ’ s new president, Javier Miley, in his first speech as head of state, warned the country of the need for shock measures, and in December the first phase of his plan to save the economy took shape.
True, it does not contain many election promises and there are things absolutely opposite – the new government is going to raise export duties and taxes contrary to the ideals of libertarianism, which the Argentine leader calls himself a representative of.
The authorities attribute the inconsistencies to the difficult economic situation, which requires the adoption of unpopular measures.
Both Miley and his economy minister, Luis Caputo, said the measures they were taking ran counter to their beliefs.
But, according to them, this is the lesser evil – on the other side of the scale they call hyperinflation and catastrophic impoverishment of the population.
On the third day of the government, December 13, Caputo announced the first steps of the new government, including a devaluation - the official rate of the dollar soared from 366 pesos to 800 pesos.
Currency restrictions in force in the country since 2019 have been maintained.
The authorities admit that there are no conditions for their cancellation until the government solves the problem with the debt instruments of the Central Bank.
Nevertheless, the devaluation, stronger than many experts and ordinary people expected, allowed to narrow the gap between the official and the so-called blue exchange rate, which is used in the informal exchange market.
Today, the latter is about 1,000 pesos per dollar.
About the same time he was on the eve of the announcement of Caputo.
The devaluation, combined with the end of the programs of freezing of prices, spurred the already high inflation.
According to experts, by the end of December it will be about 30%.
In November, the price increase was 12.8%.
Miley ’ s government calls its main task for next year a zero budget deficit.
The task is extremely ambitious, given that in October the International Monetary Fund (IMF) predicted that Argentina, with the necessary reforms, will be able to reach a surplus budget only by 2028.
To achieve this goal, the new government, apparently, will have to work hard with the same chainsaw, which has become a symbol of Miley ’ s election campaign.
In the course of the election campaign, the president has already emphasized that the state and the so-called caste, the establishment of the country, will pay for his spending reduction program, and "people will not be touched."
As the first measures show, this principle has proved to be very broadly interpreted.
So, among the first measures, Caputo announced the gradual abolition of subsidies for electricity, gas and public transport.
Today, Argentinian households with low and middle incomes pay about 15-20% of the cost of electricity.
According to the plan of the authorities, the subsidies will be completely abolished by December 2026, but in 2024 they are going to spend $2.5 billion less on them.
Transportation subsidies are expected to save $1 billion next year.
Another article for saving will be government orders for infrastructure projects.
The government promises to abandon them completely.
“There is no money ” is a phrase that Miley constantly repeats and which his supporters print on T-shirts.
Reductions also affected the state apparatus.
The government of Miley changed the number of ministries from 18 to 9, almost halved the number of departments and announced the termination of more than 5 thousand labor contracts concluded in 2023.
Reforms signed by the President
The next step of the Mileus government was an emergency presidential decree, which was signed on December 20.
The Argentine Constitution gives the Head of State the power to change legislation without the prior approval of Parliament in an exceptional situation.
Miley, under this pretext, decided to include in the decree more than 300 articles that cancel or amend existing laws.
The head of state called the main goal of the document deregulation of the economy
For example, the government abolished price controls, including on food and health insurance programs.
Suppliers of the latter after the publication of the decree have already announced an increase in the cost of services by 40%.
Introducing his decree, Miley said that the state will no longer be able to restrict exports.
Deregulation also affected the aviation industry, the rental market, labor relations, tourism and various industries, including wine and sugar.
Some paragraphs raised serious questions about the justification of their inclusion in the emergency decree.
Thus, the document gives football clubs the right to become joint-stock companies.
Miley himself in an interview with LN + explained the need for this item by the fact that the measure will attract foreign investment to the country.
For the sake of investment, the government also repealed a law restricting the ownership of land by foreigners.
The decree is due to come into force on December 29 and can only be repealed by parliament if both chambers vote in favor.
It is not yet clear what will happen to the bill in Congress.
Miley's "Freedom Comes" coalition holds 37 of 257 seats in the Chamber of Deputies and 8 of 72 in the Senate.
They have allies in the opposition, mainly in the Alliance Together for Change (24 senators and 93 deputies), but they may not be enough.
The public also met the decree ambiguously, although Miley himself believes that he can successfully bring it to a referendum if blocked by parliament.
After the announcement of the reform in different parts of the capital, there was a noise from blows to pots - a traditional form of protest in Latin America.
In addition, opposition to the decree was expressed by the largest trade unions in Argentina, not excluding the strike, restrictions on which, incidentally, were imposed by the signed decree.
Mega-bill
Miley ’ s government completed the month with the introduction of a bill to parliament with a package of reforms covering not only the economy, but also criminal law, as well as electoral law, health care, education and defense.
In total, the document contains more than 660 articles.
Especially for its consideration, the executive branch convened an extraordinary session of parliament, which will last from December 26 to January 31.
Among the proposed reforms, I will highlight the increase in export duties.
In his first speech as head of state, Miley promised that the tightening of belts will fall on the shoulders of the state, not private business.
Nevertheless, the first package of bills included the establishment of a duty of 15% for agricultural products, which are now not subject to fees, and an increase from 31% to 33% of the duty for flour and oil.
The authorities promise to subsequently cancel the fees from exporters, but for now the government, they say, needs funds to get rid of the budget deficit.
There is no deadline for the fulfillment of the promise made to exporters.
The bill also included a tax amnesty and the privatization of 41 state-owned companies, including oil and gas YPF, airline Aerolineas Argentinas, Banco Nación Bank, geostationary communications operator ARSAT and railway company Ferrocarriles Argentinos.
Miley noted that the YPF process will take place after reforms within the company, which should increase its value.
This will be his second privatisation.
In 2012, the government of Cristina Fernández de Kirchner decided to return YPF into the hands of the state, expropriating 51% of the shares of the Spanish company Repsol under the pretext of insufficient investment in the country ’ s oil and gas sector.
The conflict with the Spaniards was settled by the payment of compensation in the amount of $5 billion back in 2014, but in 2023 the consequences of the expropriation made themselves felt again – in September, the court of the southern district of New York ordered Argentina to pay $16 billion to the Burford Capital fund, which bought the bankrupt after the nationalization of the company, which owned 25% of the shares of YPF.
Miley ’ s emergency decree stated that the state ’ s share in Aerolineas Argentina ’ s shares would be transferred to its employees.
After that, the country ’ s largest airline, which has also been through privatization and renationalization, will stop receiving support from the budget, thanks to which, in particular, air traffic on not the most popular routes was maintained.
Given the emergence of new competitors in the context of deregulation of the aviation industry, Aerolineas Argentina is likely to be forced to reduce the number of destinations in the country.
At the same time, despite the declared "No Money", the bill provides for a reduction in tax on personal property and exemption from tax on the sale of real estate purchased before 2018.
Where to find money
The bill also included a painful topic for Argentina's foreign debt.
The government proposes to abolish the rule that obliges the executive branch to obtain permission from Parliament to issue dollar bonds in excess of the amount specified in the budget.
Argentina ’ s debt remains an acute problem for the country.
On December 21, the country made another payment as part of an agreement to settle its debt to the IMF.
The loan was issued to the country at the request of Mauricio Macri, who in May 2018, as head of state, turned to the IMF for help against the background of a sharp fall in the national currency.
The funds for the December tranche of $921 million to Argentina were provided by the Andean Development Corporation (ACR).
The country cannot afford to pay from its own reserves.
Already in the period from January 9 to February 1, 2024, Argentina will have to make new payments totaling more than $2.8 billion.
The government is trying to negotiate with the fund to change the agreement, but this does not negate the need to find funds to repay the payments.
One of the sources could be the $6.5 billion currency swap that China has promised to provide to the past government of Argentina.
The Miley administration is trying to gain access to it, but there seems to be little progress so far.
The situation for Argentina is complicated by the numerous statements of Miley and members of his coalition about relations with China.
During the election campaign and after the election, the head of state repeatedly said that he did not intend to promote relations with Beijing, because he did not want to do business with the Communists.
In addition, the foreign Minister of Argentina Diana Mondino said that the country will not enter the BRICS, where it was accepted at the end of the August summit of the group.
Beijing may also be concerned about the Miley administration ’ s refusal to accept government orders for infrastructure projects that fall under the purview of Chinese investors.
After taking office, Javier Miley and his team tried to mitigate past statements.
The new administration invited Chinese President Xi Jinping to the inauguration, which took place on December 10.
He himself, however, did not come, but Miley held a meeting with the Chinese delegation and sent a letter to the Chinese leader, in which he asked him to help gain access to the currency swap.
Another source of financing for Argentina could be the New Development Bank (NDB) of the BRICS, a formal application for accession to which was submitted in October by the then President of the country Alberto Fernandez.
However, the Miley administration apparently decided to freeze the process, since at the end of November Mondino said that Argentina was unable to join the NDB due to the inability to contribute capital.
It is possible that the government of Miley will decide to change its position, but so far this has not been reported.
Several Argentine experts in conversation with me complained that the Latin American country cannot afford to be guided by ideological prejudices in foreign policy, and regretted the missed opportunities in refusing to develop relations with China and BRICS.
Ghostly light at the end of the tunnel
It is possible to evaluate the reforms proposed by Miley differently, but we can definitely say that the Argentines in the coming months will have a hard time.
The government itself recognizes this.
In his first speech as head of state, Javier Miley openly said that the shock measures he proposed would lead to higher unemployment and poverty, as well as lower economic activity and real wages, but then "there will be light at the end of the tunnel."
At the same time, Miley does not call the timing of the onset of a bright
In an interview after the election, he said that it will take at least a year and a half to solve the problem of inflation.
In recent weeks, members of the administration have refrained from making any predictions, promising only to support the most vulnerable segments of the population and to do everything possible to ensure that the period of decline in economic activity passes as quickly as possible.
It remains an open question whether the residents of the country, where, according to the National Institute of Statistics and Census Indec, the poverty rate is already 40%, will have enough patience.
The opinion of the editor may not coincide with the opinion of the author.
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of rules
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What issue did Milei want to address without printing money?

The administration targets a 2024 primary balance via a 5%-of-GDP fiscal adjustment to halt money printing and inflation.

Title:

Content: Argentine President Javier Melea FP
In his first speech...
Argentina's new president warns of economic shock
Libertarian economist Javier Milley took office in Argentina on Sunday, warning in his first speech that he had no choice but to commit to a sharp and painful fiscal path to fix the country ’ s worst economic crisis in decades, with inflation heading towards 200 percent.
The president told Congress immediately after taking office: “There is no alternative to a shocking amendment, there is no money. ”
Milley, 53, took over from Peruvian leader Alberto Fernandez, whose government has been unable to stop rising prices.
Milley, a former television analyst who has become famous for his rhetoric against his opponents, China and the Pope, said: “The outgoing government has left us on the road to hyperinflation, and we will do everything we can to avoid such a catastrophe. ”
Although the letter did not include any details, Milley added that "the main steps will include a fiscal adjustment of about 5% of the country's GDP through the introduction of cuts that will be borne by the state and not the private sector."
Zelensky to visit Argentina in bid to win support from global South
Milley ’ s aggressive spending cuts have been well received by investors, who say it could stabilise a struggling economy but risks pushing more people into financial hardship, with more than two fifths already living in poverty.
Argentina ’ s net foreign currency reserves are estimated at $10 billion, and annual inflation has reached 143 percent and is on the rise.
Recession became imminent in the country, and capital controls caused exchange rates to be uncontrolled.
In his speech, Milley warned that “inflation could reach 15,000 percent a year if it is not reined in, ” vowing to“ fight as hard as I can ” to control it.
He also warned of a $100 billion debt “bomb. ”
Argentina, a major grain exporter, needs to renew a $44 billion non-performing loan program with the International Monetary Fund, while Milley needs to improve relations with trading partners China and Brazil, whom he criticized during his election campaign.
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What economic issue did Milei want to address?

What issue did Milei want to address without printing money?

With a minority, it has relied on allies and the vice president’s tie-breaking vote to advance its agenda.

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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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The Senate rejected a deregulatory decree, underscoring legislative checks on executive action.

Title:

Content: People 's Network > > International
Argentine Senate rejects reform decree signed by President Millet
March 15, 2024, 17: 19 | Source: Xinhua
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Buenos Aires, March 14 (Xinhua) -- Argentina's Senate on Wednesday rejected a decree signed by President Gloria Macapagal-Millet aimed at loosening economic controls.
The decree will then be submitted to the Argentine Chamber of Deputies for consideration and vote.
The decree, called “The Basis for the Reconstruction of Argentina ’ s Economy, ” was signed by Millet in December and contains changes or repeals to more than 300 laws and regulations, including real estate leasing, commodity supply, land use and ownership, labor reform, the Civil Code, prepaid health care and more.
According to Argentine law, even if the decree is rejected by the Senate, it is valid if it is passed by a vote of the Chamber of Deputies; if it is rejected by the Chamber of Deputies, the decree will be null and void.
Mile was sworn in as president of Argentina last December.
Mile has since introduced a series of economic reforms aimed at reducing the fiscal deficit and controlling inflation.
(Editor: Cao Xinyue, Cui Yue)
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Decrees and legal changes target labor institutions, curbing union power and reducing worker protections.

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Content: Argentine President Pledges Economic Reform in a Passionate Speech to Congress | Deutsche Welle Introduces Germany | DW | 02.03.2024
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The political climate of the times
Argentine President vows to push for economic reform
In a speech to the National Assembly on Friday, Argentina's new president, Miguel Millay, vowed to continue to push for economic reform, whether or not he has the support of the National Assembly.
He said that if the economic model is not transformed, "Argentina has no future."
Milley told lawmakers he would continue to push through reforms with or without congressional support.
Argentina ’ s new liberal president, Javier Milei, delivered a passionate speech to Congress on Friday (March 1).
He said he "will continue to push" for economic reform.
The Argentine leader, who describes himself as an "anarcho-capitalist," promised to slash state spending and reduce the government's fiscal deficit.
“We ’ re going to completely change this country. ”
Millet told lawmakers that he would continue to push ahead with reforms, whether or not he had the support of Congress.
He said "we will not back down, we will continue to move forward...
Whether it is through laws, presidential decrees or amending regulations, "he added," We will change this country forever...
with or without the support of political leaders, with or without all the legal resources of the executive branch ".
"I ask for patience and trust... It will take a while for us to see the results of the economic restructuring and the reforms that are being implemented," he added.
If the economic model does not change, "Argentina has no future"
Millay said he would introduce a bill that would penalize anyone — including the president — who financed the deficit by issuing additional money.
When he takes office, Mile will devalue the peso by about half.
"If we don't fundamentally change the economic model, then Argentina has no future," he said.
How will Argentina choose between China and the EU?
Milley's speech was repeatedly interrupted by cheers from supporters, who told Congress they would face "another animal" if they opposed his reform efforts.
Miley's Shock Therapy
After taking office in December last year, Millet issued decrees repealing or amending hundreds of laws aimed at curtailing the power of trade unions and deregulating state interference in the economy.
However, his claims met with resistance, and the court issued a ruling halting these measures.
Miller proposed a comprehensive reform plan, seeking to privatize state-owned entities and weaken labor protection.
The bill was voted down by lawmakers last month.
It includes the power to delegate to the executive branch for one year and the power to pass laws by decree on the basis of "economic emergencies".
Millet ’ s shock economic measures boosted the market, but sparked nationwide protests and strong opposition from labor unions.
Trade unions say the reforms will hurt the poor.
Despite his harsh words to lawmakers, the Argentine president struck a more conciliatory tone in his interactions with governors, proposing a 10-point “social contract ” agreed by May 25 that includes a“ rediscussion ” of the current tax distribution between the federal government and provincial governors.
Mire and the provincial governors have also been at loggerheads over the issue of funding cuts.
This week, when the governor threatened to cut off energy supplies to the rest of Argentina due to a funding dispute, the dispute heated up.
(Reuters, Associated Press, Agence France-Presse)
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How will Milei's reforms impact workers?

Milei advocates dollarization and abolishing the central bank to stabilize the economy.

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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.

What economic issue did Milei want to address?

Argentina posted its first quarterly surplus since 2008, driven by spending cuts and reduced transfers to provinces.

Title:

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.

Austerity and devaluation spiked electricity and gas prices, raised living costs, and pushed record-low peso values in parallel markets.

Title:

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.”

What economic issue did Milei want to address?

The IMF approved a $4.7 billion disbursement to back the stabilization plan.

Title:

Content: Argentine president's reforms pass first parliamentary test
Cairo - Al Wasat Gate Saturday 03 February 2024, 09: 58 am
Argentina ’ s lower house of parliament has taken a first step toward approving the sweeping package of economic, social and political reforms put forward by President Javier Milli ’ s government, prompting angry protests from the opposition.
The bill received “general ” approval in principle on Friday in the House of Representatives, whose members will examine Melli ’ s bills in detail next week.
Ahead of the vote, Milley, 53, said on social media that lawmakers had "the opportunity to show the side of history" they wanted to be.
“History will judge them according to their work for the benefit of Argentines or for the continued impoverishment of the people. ”
Milley won a resounding victory in October's election, benefiting from anger over decades of economic crisis in the South American nation, where annual inflation exceeds 200 percent and poverty levels reach 40 percent.
Milley began his term by devaluing the peso by more than 50 percent, cutting subsidies for fuel and transport, halving the number of ministries and scrapping hundreds of measures to liberalize the economy.
His reform package touches on many areas of public and private life, from privatization to cultural issues, penal law, divorce and the status of football clubs.
Marathon debate and protests in front of parliament
The House of Representatives tentatively approved the package by 144 votes to 109 on the third day of a marathon debate accompanied by protests and confrontations in front of parliament.
The bill may be subject to amendments before being submitted to the Senate.
Lorena Viaverdi, a member of Milley ’ s far-right Progress of Freedom party, said: “We have two clear choices: either we become the world ’ s largest slum, or we continue on this path to prosperity and freedom. ”
Argentine government withdraws tax reforms from broad bill
But opposition lawmaker Leandro Santoro cited the 2001 economic and social crisis as an example of the dangers of free market reforms, saying, “We Argentines know what happens when the economic model focuses on adjustment and deregulation. ”
On Friday, police again fired tear gas at crowds of protesters in front of parliament.
It came just over a week after tens of thousands of Argentines took to the streets in a major challenge to Melli ’ s budget-cutting policies.
In support of Melli ’ s reforms, the International Monetary Fund (IMF) agreed on Wednesday to disburse about $4.7 billion to Argentina.
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Price spikes, subsidy cuts, and job losses have fueled protests, strikes, and clashes with security forces.

Title:

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)

How will Milei's reforms impact workers?

Child and adolescent poverty is projected to worsen, with 70% in poverty and 34% in extreme poverty by 2024.

Title:

Content: People 's Network > > International
International observation _ How effective is the reform of Argentina 's President Mile' s 100 days in office?
March 20, 2024 15: 28 | Source: Xinhua Network
Small number
Xinhua News Agency, BUENOS AIRES, March 19 (Xinhua) -- Argentine President Gloria Macapagal-Millet has been in power for 100 days
Xinhua News Agency, Wang Zhongyi
Argentine President Gloria Macapagal-Millet has launched a series of "shock therapy" reforms aimed at reducing the fiscal deficit and controlling inflation since he took office last December.
The two main reform measures proposed by the Millet government are still pending due to parliamentary procedures.
Argentina has achieved a fiscal surplus for two consecutive months, and inflation has eased, but unemployment has increased, industrial production has fallen and prices have risen.
Analysts believe that whether the reform can get parliamentary support, whether inflation can be controlled, and whether public anxiety can be relieved are still challenges facing the government.
Prospects for reform uncertain
In his first month in office, Millet introduced two major reforms, a necessary emergency decree called "The Basis of Argentina's Economic Reconstruction" and a comprehensive bill called "The Basis and Starting Point of Liberties for Argentines", aimed at loosening government and legal control over the economy, reducing the fiscal deficit and facilitating import and export trade.
Mile also devalued the peso, Argentina's currency.
On March 14, the Argentine Senate voted to reject the necessary emergency decree signed by Millet, which will then be submitted to the Chamber of Deputies for consideration and vote.
According to Argentine law, even if the decree is rejected by the Senate, the decree may enter into force if it is passed by a vote of the Chamber of Deputies; if it is rejected by the Chamber of Deputies, the decree will be null and void.
The bill, which has not yet been passed by the parliament, is currently scheduled to be amended to be submitted to the parliament for consideration.
Analysts believe that the resistance to the reform mainly comes from the left and the trade unions, and because the ruling party and the left-wing opposition parties do not have a majority in both houses, Millet still needs to win the support of the central parties to push for the reform.
Sun Hongbo, deputy researcher of the Latin American Institute of the Chinese Academy of Social Sciences, believes that the Milai government intends to carry out a systematic and radical reform, but the relevant reform measures are facing various political checks and balances.
On the whole, Millet's government is facing constraints from various forces, such as the ruling coalition, left-wing parties, local governments and trade unions, and there are many uncertainties in its prospects for radical reform.
People's plight to be alleviated
Recently, many news is regarded as good by the Argentine government: Argentina's central bank cut its benchmark interest rate to 80%, two consecutive months of fiscal surplus, inflation pressure has eased, the International Monetary Fund approved another 4.7 billion US dollars of loans to Argentina, Argentina completed more than 50 billion US dollars of debt replacement.
Despite this, the population of Argentina is still plagued by rising unemployment and rising prices.
In March, the Argentine people ushered in the day of resumption of work and school, but many people received calls to be dismissed.
Argentine media reported that companies said sales had fallen sharply and could not afford to hire so many employees.
Unemployment, poverty and rising prices loom over the Argentine population.
Argentine sociologist Marcelo Rodríguez said that more than 50,000 jobs have been lost due to government cuts, layoffs and the withdrawal of funds from public programs, and unemployment in Argentina is expected to rise in the future.
According to the latest report of the Argentine Industrial Union, Argentina's industrial production index fell to 29.9% in January this year, the lowest level in recorded history, and for the seventh consecutive month it was in the contraction range of less than 50%.
The report said that more than half of the small and medium-sized enterprises in the survey declined in output, and multiple sets of data showed that the plight of industrial production in Afghanistan has intensified, with small and medium-sized enterprises bearing the brunt
According to UNICEF, poverty among children and adolescents in Argentina will reach about 70% and extreme poverty 34% in the first quarter of 2024.
On March 18, a number of labor unions in Argentina launched marches in Buenos Aires and other cities across the country. In January, a number of national trade unions and leftist organizations also held a national strike to protest that the reform measures of the Mile government ignored the rights of labor and social vulnerable groups, resulting in the suspension of services in banks, gas stations, airports, airlines, sanitation and other industries in Argentina.
Economy faces stagflation challenge
Argentine economist Gustavo Nefa believes that the Mile government has reversed the decline in Argentina's dollar reserves in the past 100 days, but the country's economy still faces the challenge of stagflation.
Argentina's National Institute of Statistics and Census data show that Argentina's inflation rate in February this year was 13.2%, down from 20.6% in January and 25.5% in December last year; the cumulative inflation rate in the past 12 months reached 276.2%.
Rosendo Fraga, a researcher at the National Institute of Ethics and Political Science in Argentina, said that although the monthly inflation rate has decreased, inflation is still at a high level.
The International Monetary Fund (IMF) released a report on January 30, predicting that Argentina will face recession and rising inflation in the context of a sharp economic policy adjustment.
The report predicts that the Argentine economy will shrink by 2.8% in 2024.
Argentina's TN news television recently quoted a report by the international rating agency Moody's Investors Service saying that the Argentine economy is expected to shrink by 5% in 2024, a decline far beyond the 2.5% forecast in November 2023.
In terms of inflation, Argentina ’ s inflation rate is expected to exceed 280% in 2024 and will still exceed 220% in 2025.
(Editor: Yu Yang, Xu Xiangli)
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Milei warns of a $100 billion “debt bomb” and the need for IMF backing to roll over Argentina’s $44 billion program.

What issue did Milei want to address without printing money?

IMF support comes with conditions for fiscal consolidation and macro reforms.

Title:

Content: The IMF and the reduction of the value of Argentine assets « 2 of 2 »
|
Although the debt was not sustainable, it had to be restructured as a precondition for IMF financing, and Argentina did not meet the criterion of "exceptional access 3", it did not have any possibility to acquire or re-acquire adequate access to private capital markets in 2018 and still does not have such access today.
Here remains the criterion of "Extraordinary Access 4".
When Macri ’ s government applied for IMF support in May 2018, it had been in power for more than two and a half years and clearly lacked the institutional or political capacity to deliver the required macroeconomic adjustments and structural reforms, as well as implement the social protection and gender equality policies that were included in the program. Be able to carry out the necessary reforms.
Of all those issues, the sustainability of public debt remains Argentina ’ s weak point, with total public government debt rising from 57 percent of GDP in 2017 to 85.2 percent when the 21 SCA was negotiated in 2018, and then rising to 88.7 percent when the SCA was suspended in 2019 and to 102.8 percent when the default occurred in 2020.
The debt ratio is now estimated to have reached 107 per cent by the end of 2021 – a much worse starting point for the 22 SSA than the disastrous 21 SSA.
In addition, the federal primary budget deficit (which does not include interest payments) was 3.8 percent of GDP in 2017 and the figure in 2021 was slightly better, at 3 percent.
The external financial environment is supposed to get worse as the US Federal Reserve and other major central banks raise their policy rates and reduce and reverse their balance sheet expansions.
Monetary financing from Argentina ’ s central bank is supposed to fall from 4.6 percent of GDP in 2021 to 1 percent of GDP in 2022 and to near zero in 2024.
The perception that the markets will bridge the resulting funding gap is pure fiction: the real interest rates of the central bank are supposed to become positive in 2022 in line with anti-inflation policies (which exceed 50% in Argentina) and to support the external value of the currency (the value of the peso in the parallel foreign exchange market reaches half the official rate).
But it is also likely to have a negative impact on GDP growth.
Thus, Argentina's debt burden was unsustainable. Instead of allowing the 22-credit agreement, Argentina should be asked to implement a radical restructuring of public debt that would reduce total public government debt from more than 100 per cent of GDP to no more than 60 per cent, and the International Monetary Fund (IMF) should undergo the same asset devaluation as other creditors.
The IMF should pay for its egregious failures in assessing exceptional access standards in 2018 and fortunately, egregious errors of this magnitude are uncommon.
The only similar mistake was the IMF ’ s $30 billion loan to the Greek government in 2010, “the largest IMF loan ever made at the time, ” although it was clear that Greece was heading for sovereign default, which it did in 2012.
The IMF hid behind its position as a preferred creditor and avoided asset devaluation on that occasion.
For "economic"
Project Syndicate, 2022.
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