Argentina's President Javier Milei has introduced economic reforms to liberalize the economy and reduce the fiscal deficit.

The reforms include privatization, weakened labor protection, and economic deregulation.

Milei has proposed a 10-point social contract and seeks decree power in economic emergencies.

The economic reforms have sparked nationwide protests, with critics arguing they will hurt the poor and vulnerable.

Milei's government has introduced austerity measures that will affect Argentina's poorest people.

The economic reforms have been criticized for exploiting workers' rights and threatening job security in Argentina.

Milei's economic reform plan includes nearly 300 changes to reduce government payroll, ease labor and rent laws, and boost exports and investment.

The IMF has provided Argentina with $44 billion in aid to support economic development and stabilization.

The IMF's funding may compromise Argentina's sovereignty due to conditional economic reforms.

Argentina faced a severe economic crisis, with inflation rising to 115% due to a drought.

The IMF's program in Argentina aims to control inflation and support 0.2% economic growth in 2023.

Javier Milei's economic reforms may take two years to implement, and dollarization requires Congressional approval and constitutional change.

Milei proposed eliminating the Argentine Central Bank, which may face resistance from Congress.

Milei plans to replace the peso with the US dollar and liberalize Argentina's economy.

Over 300 restrictions will be amended or repealed, easing the real estate market.

The goal is to achieve a zero budget deficit next year and abolish energy subsidies by 2026.

Left-wing parties and trade unions opposed Javier Milei's economic reforms in Argentina, which included raising export duties and taxes.

Argentina's President Javier Milei has introduced economic reforms to liberalize the economy and reduce the fiscal deficit.

Title:

Content: Argentine President Pledges Economic Reform in a Passionate Speech to Congress | Deutsche Welle Introduces Germany | DW | 02.03.2024
1.
Inhalt
2.
Navigation
3.
Weitere Inhalte
4.
Metanavigation
5.
Suche
6.
Choose from 30 Languages
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)
© 2024 Deutsche Welle Copyright Notice: All content in this article is protected by copyright law and may not be used without special permission from Deutsche Welle.
Any misconduct will lead to recovery and criminal prosecution.

What issue did Milei want to address without printing money?

The reforms include privatization, weakened labor protection, and economic deregulation.

How will Milei's reforms impact workers?

Milei has proposed a 10-point social contract and seeks decree power in economic emergencies.

The economic reforms have sparked nationwide protests, with critics arguing they will hurt the poor and vulnerable.

How will Milei's reforms impact workers?

Milei's government has introduced austerity measures that will affect Argentina's poorest people.

Title:

Content: Argentina's President Saves Economy, 5,000 Government Employees Don't Continue Inflation, People Crash
International Center Tsai Sha-ling / General Report
Javier Milei, a far-right liberal economist known as “Trump Argentina, ” announced a“ shock therapy ” after his election as Argentina ’ s president to rescue a serious economic crisis with drastic fiscal reforms, insisting that it is normal for things to get worse until concrete results are achieved, calling on people to survive the inflationary boom, and adding to a series of reforms, including the layoffs of more than 5,000 government posts, means that Thousands of government employees will not be rehired.
This is an advertisement, please continue reading.
Speaking to supporters, Mirei declared that he was “unwinding the suffocating web of government control ” and changing a large number of regulations that are hindering economic growth, stressing:“ We have no choice, no time, no room for meaningless discussion. ”
Our country needs to take immediate action, "he said.
In order to reduce government spending, Mirei announced that he will not renew the contracts of government employees hired before he takes office in 2023, and that he will be sworn in as president on December 10 this year; employees hired before 2023 will not be affected for the time being, but the related contracts will also be reviewed.
The report pointed out that the 2023 as the demarcation point, apparently in response to the former president's proposed salary increase in the last year of his term.
With inflation expected to reach 200% by the end of the year, Mirei intends to accelerate measures, including privatization of state-owned companies, in the hope of boosting exports and investment, easing labor laws, reducing protections for employees, making it easier for companies to lay off workers, and banning state intervention in the rental housing market.
In addition, energy and transportation subsidies will also be cut, and some government departments will be abolished.
Whether Mirey ’ s shock therapy will save the economy is still unknown, but people have taken to the streets to protest against soaring prices.
Some economists believe that although such measures may be necessary to solve Argentina ’ s long-term financial problems, without an adequate safety net, the poorest people in society may struggle to survive and may not be able to survive until the country ’ s economy returns to normal.
This is an advertisement, please continue reading.

The economic reforms have been criticized for exploiting workers' rights and threatening job security in Argentina.

Title:

Content: Instant Hot Spot
Video: Police clash in the capital under debate over Argentina ’ s reform bill (13: 32)
Police clash in Argentina to protest president ’ s plan for economic reform (AFP)
Argentina ’ s far-right President Javier Milei ’ s controversial economic-saving reforms, including expanding presidential powers and cutting labor protections, were approved by a vote in the Senate on Wednesday.
Demonstrations broke out in the capital, Buenos Aires, with thousands of demonstrators throwing petrol bombs and burning cars outside the parliament. During the demonstration, demonstrators tried to enter the parliament through the fence and threw stones at the police.
Riot police used pepper spray and then fired tear gas and water cannons to disperse.
Dozens of demonstrators and opposition lawmakers were injured in the clashes, while officials said at least 20 other police officers were injured.
Police said they arrested 15 people.
In a statement, President Milai ’ s office thanked the security forces for suppressing “terrorists ” who attempted to stage a coup, stressing the need to make Argentina the freest country in the world.
The reform bill proposed by Miley aims to save the Argentine economy by declaring a one-year economic emergency, allowing Miley to abolish some federal agencies, and privatizing some state-owned enterprises, as well as cutting pensions and labor rights.
Some opposition lawmakers criticized the bill as severely exploiting workers' rights, as if it were "going back to the last century".
Some protesters also criticized the measures as going back 100 years in Argentina.
The bill will be debated in the Senate on a case-by-case basis, and is expected to be voted on again on Thursday, before being passed and sent back to the House of Representatives for final consideration. (AFP / BBC)
Related Words: Argentina Miley Reform Bill Editor 's Recommendation Hot HotPICK
Previous / Next News

How will Milei's reforms impact workers?

Milei's economic reform plan includes nearly 300 changes to reduce government payroll, ease labor and rent laws, and boost exports and investment.

Title:

Content: Argentina ’ s President Announces Staff Contract Cuts, Eases Regulations
As part of the Argentine president ’ s new plan to liberalize the ailing economy, an important step has been announced that the contracts of more than 5,000 employees hired this year before he took office will not be renewed, as part of the government ’ s efforts to implement comprehensive economic reforms.
President of Argentina
Since taking office on December 10, the right-wing liberal president has announced a plan to liberalize Argentina ’ s struggling economy by amending or repealing more than 300 current restrictions, regulations and laws, including rents and labor laws.
The authorities have made it clear that the contracts of other government employees hired before 2023 will be reviewed.
The goal of this 2023 deadline seems to be to target outgoing presidents in increasing payrolls in their final year.
Argentina faces major economic challenges, with inflation expected to reach around 200 percent by the end of the year.
In light of this, President Miley has pledged to reduce government regulation and payroll, and to allow the privatization of state-run industries to boost exports and investment.
The cuts have sparked protests in the country, but President Miley has reiterated his commitment to moving forward with his plan.
“Our goal is to start rebuilding our country, to restore the freedom and independence of individuals, and to start changing the many regulations that were a hindrance to economic growth and stopped it, ” he said.
The announced economic reform plan includes nearly 300 changes including the privatization of several state companies and the relaxation of protections offered to tenants, employees and shoppers.
You may be interested in:
About the Author:

How will Milei's reforms impact workers?

What industries were affected by Milei's deregulations?

The IMF has provided Argentina with $44 billion in aid to support economic development and stabilization.

Title:

Content: IMF approves $7.5 billion disbursement to Argentina
Cairo - Center Gate Wednesday 23 August 2023, 09: 55 pm
The International Monetary Fund (IMF) on Wednesday approved a new tranche of $7.5 billion for Argentina, a spokesman for Argentina ’ s economy minister said.
The amount corresponds to the fifth and sixth reviews of the aid program for the South American country, which were approved at the end of July under an agreement between the Argentine government and the International Foundation.
This brings the amount Argentina has received so far to $36.3 billion since the aid program began in March 2022.
Total aid to Buenos Aires worth $44 billion
In total, the 30-month program is based on total aid to Buenos Aires of $44 billion (about SDR 32 billion, the IMF ’ s unit of account based on a basket of currencies).
It is the largest aid program currently implemented by the IMF.
Argentina depreciates currency after surprise primary election results
Argentina to repay IMF loan in yuan
The agreement is important for Argentina ’ s Economy Minister Sergio Massa, who is the candidate in the October presidential election for the Union for the Fatherland coalition, which brings together parties supporting the outgoing centre-left government of Alberto Fernandez.
Massa was in Washington on Wednesday where he met privately with IMF Managing Director Kristalina Georgieva.
On August 13, the presidential primaries surprised Javier Milley, a 52-year-old ultra-liberal economist, with 30 percent of the vote.
Massa came in third with 27% of the vote.
Argentine authorities reduce peso value by 20%
Argentine authorities devalued the peso by about 20%, in order to protect it from potential market reaction after the primaries.
The central bank announced an increase in deposit rates from 97% to 118%.
For its part, the IMF praised "the recent actions and commitment of the (Argentine) authorities in the direction of maintaining stability, rebuilding foreign exchange reserves and improving the budget system," said International Monetary Fund spokeswoman Julie Kozak, who did not explicitly refer to the IMF's decision.
The agreement signed in March 2022 between the IMF and the government, the 13th between them since 1983, is specifically aimed at controlling chronic inflation in the country.
The IMF expects Argentina to grow by just 0.2% in 2023, with inflation expected to fall to 88% by the end of the year.
But inflation was 115.6 percent year-on-year in June, according to data from the National Institute of Statistics.
More from the middle gate.
Related Titles
BRICS invites Egypt, Saudi Arabia and UAE to join
Turkish central bank raises interest rates to 25%
70 million Asians join ‘ extreme poverty queue ’
French foreign minister accuses Russia of stockpiling grain to sell at highest price
Turkish lira improves after Erdogan supports rate hike
More...
Most preferred in this section.

The IMF's funding may compromise Argentina's sovereignty due to conditional economic reforms.

Title:

Content: IMF Lends Argentina $7.5 Billion - Sunrise Gate
Thursday 24 August 2023 7: 37 AM Cairo Cairo 24 °
Most Read
You might like it, too.
Share your opinion
Who is the best defender in the Egyptian league in the 2022 / 2023 season?
IMF lends Argentina $7.5 billion
Published on: Thursday 24 August 2023 - 7: 31 AM | Last updated on Thursday 24 August 2023 - 7: 31 AM
The International Monetary Fund (IMF) has issued a $7.5 billion loan tranche for Argentina in a deal that took four months to negotiate.
The IMF executive board announced the deal in Washington on Wednesday.
In a statement released on Wednesday, the IMF said: “The Executive Board of the International Monetary Fund (IMF) today completed the fifth and sixth reviews of the 30-month Extended Fund Facility for Argentina.
The Council ’ s decision enables the immediate disbursement of approximately $7.5 billion. ”
Due to severe drought and political errors, Argentina has failed to make the agreed budget adjustments, the IMF said.
However, it was possible to agree on new targets such as increasing central bank reserves and more fiscal discipline.
The Buenos Aires Economy Ministry must pass more than half of the newly disbursed money to other creditors, La Nación reported.
In order to meet its interest obligations to the Fund, Argentina recently received several temporary loans from China and Qatar and from the Latin American Development Bank.
South America ’ s second-largest economy is mired in a severe economic and financial crisis.
Argentina suffers from a bloated state apparatus, low industrial productivity and a large parallel economy that deprives the state of much of its tax revenue.
The national currency, the peso, continues to fall against the US dollar, and debt is constantly increasing.
Inflation has risen to 115%.
You might like it, too.
Share your comment

Argentina faced a severe economic crisis, with inflation rising to 115% due to a drought.

The IMF's program in Argentina aims to control inflation and support 0.2% economic growth in 2023.

Javier Milei's economic reforms may take two years to implement, and dollarization requires Congressional approval and constitutional change.

Title:

Content: Argentina election: Javier Milei's radical proposals face test of reality

  • Oops!
    Something went wrong.
    Please try again later.

Javier Milei, the anti-establishment politician who cruised to victory in the Argentine presidential election last week, has courted intense controversy with radical, provocative policy proposals and statements.

This led many detractors of the self-styled "anarcho-capitalist" to call his candidacy a "leap into the void".

Now, with the mop-haired president-elect only two weeks away from taking over Latin America's third-largest economy, many are asking, how will his policies and positions face the test of reality?

Taming inflation takes time

Javier Milei had proposed to dollarise the economy and eliminate the Argentine Central Bank as a strategy to "kill" hyper-inflation. This meant making the US dollar the national currency in place of the Argentine peso, whose value, Mr Milei said, had been "melting like blocks of ice in the Sahara".

One obstacle is that ditching the Central Bank and making the US dollar legal tender would need approval from the Argentina's Congress and could even require changing the constitution.

Although Mr Milei convincingly won the presidency, his Libertad Avanza (Freedom Advances) movement is barely the third largest political force in Congress. This suggests difficult negotiations might be in store.

Some economists have also questioned whether Mr Milei's plans are feasible, saying they would weaken his government's ability to manage domestic monetary policy.

Having the US dollar as the Argentine currency would effectively leave interest rate policy in the hands of the US Federal Reserve. Argentina's economy would be more vulnerable to external shocks involving the US dollar, for example sudden rises in prices for oil and fuel imports, which could make internal adjustments even more painful inside the country.

Sceptics also point out that Argentina would need to have in hand the US dollars to replace the pesos. Experts believe this could require anywhere between US $35bn to $50bn which indebted Argentina currently does not have and may not be able to borrow easily.

Mr Milei himself has admitted his "shock adjustment" economic stabilisation recipe could actually take up to two years to bring down inflation. "Saying anything else is lying," he said.

A climate sceptic?

Another topic that had made media headlines was Mr Milei's apparent declaration of himself as a climate change "sceptic", that is, someone who denies the role of humans in global warming.

"I do not deny climate change. What I am saying is that there is a temperature cycle in the history of the Earth... Therefore, all those policies that blame humans for climate change are false," Mr Milei said during a presidential debate last month, causing much commentary and criticism.

In his proposed government programme, one of the numerous ministries he had said he planned to axe would be the existing environment ministry.

Such apparent climate scepticism risked putting Mr Milei sharply out of tune with an international majority of governments and leaders who plan to gather at the COP28 climate conference in Dubai soon to seek urgent solutions to the problems of climate change and global warming.

Pragmatism and the Pope

Before he was elected, Mr Milei virulently attacked Argentine Pope Francis, calling him a "Jesuit who promotes communism", and even the "representative of the evil one [the Devil] on Earth".

Such statements caused frictions with the local Catholic Church and the Vatican.

However, this antagonism appeared to miraculously dissipate only days after his election win, when Mr Milei had what he called a "very friendly" phone call with the Pope, whom he addressed as "Your Holiness", inviting him to visit Argentina in 2024.

Asked in a TV interview about this change of heart, Mr Milei conceded that, when one is president, "there are some things that require greater doses of pragmatism".

No break with China and Brazil

Before his election, Milei had signalled he could freeze ties with Brazil and China, Argentina's two top trading partners, on the grounds that he did "not make pacts with communists".

"I am going to be aligned with the United States, Israel, and the free world," he said.

Not surprisingly, this assertion caused consternation in Beijing and Brasilia, as well as in Argentina.

A Chinese foreign ministry spokesperson was quoted as warning that it would be a "huge foreign policy mistake" for Argentina to cut ties with countries such as China and Brazil.

Mr Milei's predecessor, outgoing left-wing President Alberto Fernández, had carefully nurtured ties with Beijing and had welcomed an invitation to join Brics, the China-led group which also comprises Brazil, Russia, India, and South Africa.

Experts questioned the wisdom of dismantling a relationship that clearly brought benefits to Argentina, and not only by China being a top market for Argentina's soybean, meat and grains.

China was also helping to prop up Argentina's financial reserves with a major currency swap deal - significant support for a country already heavily indebted to the International Monetary Fund (IMF).

Days after the election, however, there seemed to be clear signs that no major break in relations was planned. The president-elect received a personal letter of "congratulations and good wishes" from Chinese President Xi Jinping and Mr Milei himself made a point of thanking Xi on social media.

Mr Milei's pick for foreign minister, Diana Mondino, also dismissed as "nonsense" any suggestion that there would be a rupture in "commercial relations" with China or Brazil.

In Brazil, Mr Milei's invitation for former President Jair Bolsonaro to attend his 10 December inauguration was interpreted as "unfriendly" towards Brazil's current left-wing President Luiz Inácio Lula da Silva.

But Milei has since said Lula would be "well-received", if he wanted to come.

Dictatorship denial

Mr Milei and his vice-presidential running-mate Victoria Villarruel also ignited intense controversy during the campaign with their position regarding Argentina's 1976-83 military dictatorship.

Defying traditional positions held by Argentina's government and society for the last 40 years, Mr Milei caused outrage by contesting the generally accepted estimate of those abducted and "disappeared" in the dictatorship - 30,000 - asserting the actual number was closer to 9,000.

The candidate argued that the political violence of the 1970s in Argentina was a two-sided "war" in which "the forces of the state committed excesses but the terrorists [anti-government guerrillas] ... [also] committed crimes against humanity".

This equivalence of presentation of the two sides raised howls of protest from groups like the Plaza de Mayo mothers and grandmothers of disappeared persons.

This was just another striking way in which the Milei-Villarruel duo were trying to shake up the political status quo in Argentina. The next four years will show if they can do it.

Milei proposed eliminating the Argentine Central Bank, which may face resistance from Congress.

Milei plans to replace the peso with the US dollar and liberalize Argentina's economy.

Title:

Content: Argentine President Announces Major Plan to Liberalize Economy
Cairo - Center Gate Thursday 21 December 2023, 09: 53 am
Argentina is awaiting a presidential decree to liberalize the struggling national economy announced by hard-line liberal President Javier Milley on Wednesday in a televised speech aimed at starting the path of rebuilding the country, restoring freedom and independence for individuals, and disarming the myriad regulations that have hampered economic growth.
In his speech, Milley said he would amend or repeal more than 300 of the current restrictions, regulations and controls, including those related to rents and labor laws.
Argentine President Votes in Boca Juniors Elections
Argentine President Meets Biden Advisers
The president, who was elected in November, said one of the measures to be included in the decree would be the repeal of the rent law “so that the real estate market starts to run smoothly again and so that rent is not a problem. ”
Privatization of public companies
Laws prohibiting the privatization of public companies will also be repealed, he said, noting that all such companies will be transformed into limited liability companies in preparation for their privatization.
Milley also announced his intention to “modernize the labor law to facilitate the process of creating real jobs, and amend the company law so that football clubs can become limited liability companies. ”
The decree amends and removes a long series of other regulatory restrictions in sectors ranging from tourism, satellite internet, pharmacy, agriculture and international trade.
For the decree to enter into force, it must be published in the Official Gazette, and then examined by a joint committee of the House of Representatives and the Senate to determine whether or not it should be repealed.
Constitutional lawyer Emiliano Vitaliani told AFP that the decree would only be revoked if it was rejected by the Senate and the House of Representatives.
More from the middle gate.
Related Titles
Lufthansa orders 40 Airbus and 40 Boeing aircraft for $9 billion
President of the International Committee of the Red Cross: The body almost drowned in a crisis...
IMF approves $100 million loan to Somalia
Canada to buy 11 military drones for a total of $2.49 billion
Has OPEC + lost its ability to adjust the rhythm of oil prices?
More...
Most preferred in this section.

Over 300 restrictions will be amended or repealed, easing the real estate market.

suspended 366 decrees to ease economic controls and reduce spending.

The goal is to achieve a zero budget deficit next year and abolish energy subsidies by 2026.

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.
The use of the material is allowed subject to compliance
of rules
citations of the site tass.ru

What issue did Milei want to address without printing money?

Left-wing parties and trade unions opposed Javier Milei's economic reforms in Argentina, which included raising export duties and taxes.