Milei, nothing but crazy. This is how he wants to change Argentina's destiny with inflation
There is a thin thread that binds Giorgia Meloni to the new Argentine president Javier Milei, renamed during the electoral campaign the “loco” (the madman), for some of his bizarre propaganda outings. But his first moves in economic policy instead show a pragmatism, a realism that seems to displace many, especially on the left, on the eve of the elections, who feared a definitive drift of the South American country with him in power.
Machiavelli states that “everyone understands that it is very praiseworthy for a prince to keep his word and live with integrity, without cheating or deceit. However, the experience of our time shows that princes who have done great things have not striven to keep the word given.” The measures announced by the administration of Javier Milei they seem to be in line with the pragmatism of that passage in “The Prince”.
Obviously having made due proportions of the case, the new Argentine president in these first economic policy moves seems to be following in the footsteps of our Prime Minister, who in a few months of government has categorically denied all her detractors both at home and abroad abroad, showing a pragmatismpreparation and authority, also recognized by the main international newspapers, the latest in chronological order, the newspaper Politica few days ago.
READ ALSO: Argentina, Milei in the storm. First 'cacerolazo' for the new president
As the Argentine newspaper rightly pointed out Clarin “The plan that is being revealed is far from what could have been imagined if only the declarations of the candidate of the La Libertad Advance during proselytism. Plan Milei it seems like an anti-Milei plan.”
And on the other hand, the situation of the Argentine country after years of absolutely disastrous Peronist governments, is now close to the point of no return, as said by the new economy minister, nicknamed by some as the Messi of finance, Luis Caputo “We are facing the worst legacy in our history. If we continue in this direction, we are inevitably heading towards hyperinflation. We could reach levels of 15,000% per year. To understand this in numerical terms, we are talking about the price of a milk that goes from 400 pesos to 60,000 pesos in a year. Our mission is to avert this catastrophe.”
With catastrophe as a counterpoint, Caputo he tried to portray the measures as inevitable. He announced a depreciation of the official dollar, from 400 to 800 pesos, but did not mention measures with respect to other dollar quotations, which should coexist with each other. This will be accompanied by a temporary increase in the so-called “national tax” for card transactions abroad or on imports and withholding taxes on non-agricultural exports.
On the other hand that music with Milei would have changed beyond the typical electoral campaign proclamations (anyone who is scandalized is now simply a hypocrite) it had already been understood during the inaugural speech, in which the president had implied that to save the country shock measures would be needed, like the one for example certainly not popular (other than populist as everyone now loves to define those who deviate from the progressive narrative) of an increase in tax burden of the State through taxesand export withholdings to compensate for a drastic devaluation of the currency.
But moreover Milei he is also showing all his skills as a great economist, beyond what the left around the world was saying about his incompetence and recklessness (a bit like what was also said about the Melons and its management team), as also tells who, how Nicola Procaccini co-president of Ecr group in the European Parliament, had the opportunity to meet him directly “He is a brilliant and well-prepared economist. His abilities and his ideas can allow this nation, which has many ties with Italy, to free itself from economic stagnation which also causes social instability.
“But as promised Milei he also seems to want to put a stop (remember the image with the chainsaw that so made the right-thinking left in Italy shudder) to the intolerable level of corruption that exists in the country. A first measure in this sense was to eliminate the infamous Import System of the Argentine Republic, SIRA. This is the mechanism with which purchases abroad were controlled, with scandalous methods due to the levels of corruption that would have been reached, under the Peronist governments, including the last one of Massa* with bribe payments of the order of 10/15 % of total amount of goods imported into the country).
The leverage with which Milei intends to make ends meet is inflation. Just like Macri benefited from Kirchnerism's legacy of financial isolation, which allowed it to attenuate fiscal adjustment by taking on debt, a management in which Luis Caputo was fundamental, Milei plans to exploit Massa's inflationary legacy to, by trampling on nominal spending, reduce it in real terms. It won't be easy but it is a shock therapy as announced to try to resuscitate those who are now in an almost irreversible coma.
Another issue that Milei will soon have to address will also be that of international alliances to show if he intends to abandon like Brazil's Lula the historic alliance with the USA to deviate towards the new world order that China and Russia are trying to build with the expansion of Brics. On the eve of his words seemed clear and showed his intention not to give in to the dangerous enticements of China, which nevertheless remains an important trading partner on a par with the USA.
We will see and in all this it is to be hoped that Europe can also have its say even if hopes are certainly fleeting. Meanwhile, Milei immediately receives the approval of International Monetary Fund on new economic measures “I welcome – writes in X Georgieva – the decisive measures announced by Javier Milei's government to address Argentina's significant economic challenges: an important step towards restoring stability and rebuilding the economic potential” Argentina.” Not bad for a “madman”.
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