40 years after the return of democracy in Argentina, Javier Milei inaugurated this Sunday a new direction for the South American country. With his back to Congress – “the political caste” – and facing the people who voted for him, the far-right president gave a devastating first speech about the inheritance received and warned that he will start his mandate with a very harsh cut in public spending of some 20,000 million dollars: “There is no possible alternative to the adjustment, there is no money.” The picture he painted was so stark that even the thousands of supporters gathered in the streets fell silent during part of the presidential speech.
The decision to break the tradition of speaking before the Legislative Assembly was a symbolic gesture of far-right populism that takes its first steps in Argentina with Milei. He did so surrounded by other leaders of this rising global trend, such as the Hungarian Prime Minister, Viktor Orbán, the former president of Brazil, Jair Bolsonaro, and the leader of the Spanish Vox party, Santiago Abascal, invited to the inauguration ceremony. .
“Today we end a long history of decadence and decline and begin the path of rebuilding our country,” the president began from the steps of Congress in front of a packed plaza. It first went back to an alleged golden age of Argentina, at the end of the 19th century and the beginning of the 20th, when the South American country was the “breadbasket of the world”, to quickly return to the bomb ready to explode that it received at the hands of the Peronist Alberto Fernandez. “No government has received a worse inheritance than what we are receiving,” he warned. Unlike the optimistic vision that Mauricio Macri printed when he became president in 2015, Milei reiterated again and again that the country he receives is a scorched earth.
Official figures on the situation in Argentina show that the economy is in a critical situation. During the four years of Fernández's mandate, inflation almost tripled – from 54% to 142% – and poverty grew five points, to exceed 40%. The primary deficit is 3%, Argentina is indebted to external and internal creditors, there are no dollars in the central bank and the real value of the peso, the national currency, is at rock bottom.
Fernández says goodbye with a high level of rejection of his management, over 70%, and plans to move to Spain now that he has transferred power. This Sunday, upon arriving at Congress, he went up quickly and without turning to look at the crowd that was waiting for his successor and chanted slogans against his vice president, Cristina Fernández de Kirchner.
The specter of hyperinflation
The data that Milei disseminated is much worse than the official ones and among them appeared one of the ghosts most feared by Argentines, that of hyperinflation. The last one was in 1989 and no one who lived through it has been able to forget it. That year the price increase was 3,079%: it was impossible to know how much a kilo of flour or a bottle of oil cost because prices changed between morning and noon. Poverty skyrocketed and supermarkets were looted in popular neighborhoods. “They leave us with inflation of 15,000% annually,” Milei warned this Sunday.
“Our goal is to do everything possible to avoid it,” he stressed. The risk of failure would mean a growth in poverty of up to 90% and half of the population being destitute, that is, not having enough income to even buy food.
The recipe proposed by Milei to rebuild Argentina is sweat and tears. He anticipated that he would make a spending cut equivalent to 5% of GDP and hinted that he would eliminate subsidies for public transportation, gas, electricity and water. The numerous times she stressed the inevitability of an adjustment are reminiscent of British conservative Margaret Thatcher's political slogan in the 1980s: “There is no alternative.” Like her, the new president of Argentina believes that the solution is to open our arms to the market and that any other solution is destined to fail.
Milei is preparing a large legislative package that he will send to Congress in the coming days and has also anticipated that he will call extraordinary sessions. Her party, La Libertad Avanza, has only 15% of the deputies and 10% of the senators, and will have to negotiate every step she takes to approve new laws and reforms. However, he is confident that at least the first measures will find little opposition given the number of votes that support it, almost 56% of the population.
Support for the new president is majority but not total in an Argentina that is more polarized than ever. Millions of people received his words as a message of hope and were convinced, as he promised them, that the imminent sacrifice “is the last bad drink to begin the reconstruction of Argentina.” They greeted him and cheered him in the streets shouting “Argentina” and “freedom.” Others, on the other hand, trembled when reading between the lines that a new era of privatizations and pro-market economic policies begins that connects with that of the Peronist Carlos Menem in the nineties and remember that that time the country exploded into the air with the corralito crisis of 2001 -2002.
It is unknown whether this polarization will transfer to the streets. Argentina has a long tradition of resisting unpopular laws, but the Government warns that in this case it will not sit idly by. He will respond with a heavy hand to those who oppose him with violent protests and unauthorized street closures. “Those who want to use violence or extortion to bring about change, we tell them that they are going against us. We tell them that they are going to find a president with unwavering convictions who will use all the resources of the State to advance the changes that our country needs.” The person responsible for applying the heavy hand will be Patricia Bullrich, who repeats in the Security portfolio after having held that position under the presidency of Macri.
Milei has four years ahead of her with great challenges. This economist, the first to reach the Argentine presidency, is in a hurry to get started.
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