Argentina has officially taken the turn towards ultraliberalism. Elected on November 19, Javier Milei became president on Sunday, announcing an inevitable “shock” of austerity.
“There is no alternative to an adjustment, there is no alternative to a budgetary shock,” because “there is no money!” “, he told several thousand supporters outside Parliament, where he had just taken the oath. “We know the situation will get worse in the short term. But afterwards we will see the fruits of our efforts,” he added, promising “all the necessary decisions to resolve the problem caused by 100 years of waste from the political class.”
Milei sees the State as an “enemy”
In front of him, a sea of sky and white Argentine flags cheered his interventions, with cries of “Libertad, Libertad”, even “Motosierra!” » (with the chainsaw!), in reference to the tool he brandished in the countryside, to symbolize the cuts to come in the “enemy state”.
At midday, Javier Gerardo Milei, 53, became the twelfth president of Argentina since the return of democracy forty years ago, swearing before parliamentarians to honor this office “with loyalty and patriotism”, then donning the presidential sash. He also received the traditional custom-made scepter for each president, in his case bearing the faces of his five English mastiff dogs – “his children”, as he calls them – engraved on the pommel.
Milei was invested under the benevolent gaze of nationalist or conservative leaders or politicians, who had greeted his victory with enthusiasm: the Brazilian Jair Bolsonaro, the Hungarian Viktor Orban, the leader of the Spanish far-right group Vox, Santiago Abascal. Also present is the Ukrainian Volodymyr Zelensky, with whom Javier Milei shared a long hug. The King of Spain and the presidents of neighboring Uruguay, Chile and Paraguay were also in Buenos Aires. The Brazilian Lula, strongly criticized by Milei in the past, had delegated his head of diplomacy.
Inflation at 143% over one year
Third largest economy in Latin America but mired in chronic inflation, at 143% over one year, structural debt, and 40% poverty, Argentina is preparing for painful adjustments.
Uncertainty remains regarding the very first measures: devaluation of the peso? First budget cuts? Restriction or even ban on monetary issuance? On Sunday, Javier Milei reaffirmed that a first concrete objective will be a reduction of 5% of GDP in the budget deficit, which “will fall on the State, not the private sector”.
But by then, “people will have ‘free’ prices for the first time in a long time: the end of ‘controlled prices'”, estimates Viktor Beker, economist at the University of Belgrano, predicting high inflation in December , January. Milei himself has warned that inflation will not be brought under control for “18 to 24 months”.