A week ago, the Spaniards learned about what Javier Milei calls the “principle of revelation.” This is the formula that he uses to display as a victory any defeat or setback that he causes and that, in this case, he launched against the president of the Spanish Government, Pedro Sánchez. “I didn’t mention Sánchez’s wife. So, beginning of revelation, he incriminates himself,” said the far-right president to defend himself from the open diplomatic crisis between Argentina and Spain after having attacked Sánchez and his wife, Begoña Gómez, during a Vox rally in Madrid last Sunday. In Argentina it generated a stir, but less than in Spain; Well, he always repeats the same strategy. Milei celebrated monthly inflation of 8.8%—and year-on-year of 289%—as if it were a goal for the Argentine team. He is convinced that he is “the most popular politician in the world” and that those who oppose him are “ Lilliputians.” Seen up close, the president celebrates over a country on fire.
This May 25, the Government called on Argentine citizens “to celebrate freedom” in the streets of Córdoba, the Argentine city where Milei won more than 70% of the votes in the elections. For this national date and in that same place, Milei had planned to sign a solemn May Pact with the provincial governors after the approval of his star law, which he called the Law of bases and starting points for the freedom of Argentines. It was not possible: the project has run aground in the Senate, for now without enough votes for its approval.
The president had to settle for an event in which he spoke to his followers in Córdoba, this Saturday. “Milei, dear, the people are with you,” they sang to him before he began to read a speech in which he reiterated his favorite idea: that Argentina was a world power from the end of the 19th century until state interventionism brought it to power. current decline. Specifically, he made two announcements. First, that he will create a council with political, business and union representation to advance with the reforms he intends. And second, that it will begin to eliminate taxes, but only if the basic law and the fiscal package are first approved, which precisely foresees the application of taxes. “There is no possible destiny for the nation if we do not take the weight of the State off the shoulders of good Argentines,” he harangued.
No law in six months of mandate
Milei took office in December and a few days later he presented the first draft of the norm, with more than 600 articles, among them the one with which he intends to provide himself with certain legislative powers. His refusal to make changes sank the law. But Milei refused to acknowledge that legislative defeat. For him it was “the beginning of revelation through” part of his master plan to “unmask” the deputies of “the caste” who, according to his speech, only seek to maintain their privileges. He accused them of “criminals” and “extortionists”; Later, he defined Congress as “a rat’s nest.”
Despite the insults, he returned to the fray with a second version of the law, urged by the International Monetary Fund and investors. He was approved in the Chamber of Deputies, but is resisting in the Senate, where his party, La Libertad Avanza, has only seven of the 72 seats and a small political waist.
Milei has passed zero laws in half a year of his mandate, an anomalous situation that, however, does not give rise to self-criticism. “Those responsible are a sector of politics that does not want Argentina to move forward,” presidential spokesperson Manuel Adorni justified the legislative paralysis in a press conference. “If they let us do what we have in mind, they are the ones who know that Argentine politics will not have room for them,” he said.
When the Government liberalized the prices of private health insurance, it only backed down, attacking them for “having declared war on the middle class.” His intention to stop financing public universities – and promote private education with subsidies to families who choose it – was defeated by a massive demonstration. The president backed down, but not before accusing his opponents of “taking a noble cause,” such as the defense of free education, to “prostitute” it.
Adorni also juggled to try to justify that Milei’s visit to Spain was “private” – as the Argentine embassy in Madrid defined it in an official letter revealed by Morning Express – and also “public”, to justify having paid with State money. a personal and partisan trip (he attended a meeting of extreme right-wing parties), which at the last minute included a meeting with businessmen.
This Wednesday, a company rented the most emblematic stadium in Buenos Aires, Luna Park, for the president. Milei brought her band of friends on stage to perform with them the same song that she sang a cappella throughout the election campaign. Panic Show It rang three times, the last of them with Milei on the microphone. The repetition is reminiscent of his political strategies: the fight with Sánchez comes after the clashes that he carried out against the authorities of Brazil, China, Colombia, Mexico and Chile. His trip to Spain was similar to the one he had previously taken to the United States to participate in the Conservative Political Action Conference in Washington.
The Argentines saw him euphoric in Luna Park and heard Adorni present him as “the greatest exponent of freedom in the world, no matter who it may be; the president with the best image on the continent; the annihilator of fiscal deficit.” The more than 5,000 participants in the event applauded it fervently and joined in the party atmosphere. But Milei celebrates in the midst of a deep economic crisis, aggravated during the months he has been in office, and after years without a solution.
Economy in recession
“We are beating inflation,” the president celebrated this month. Although Argentina remains at the top of the countries with the highest inflation in the world, the index has been falling. The National Institute of Statistics and Censuses (Indec) reported 8.8% inflation in April, the first month below double digits since October, with a peak of 25.5 in December after the devaluation and deregulation with the that Milei started his mandate. Along with price containment, the shock The adjustment proposed by the Government allowed the public accounts to achieve a surplus, which earned Milei congratulations from the IMF.
But if Milei’s plan managed to fend off two of the great ghosts of the Argentine economy, inflation and deficit; simultaneously awakened other specters. The flip side of its results is a vast recession, declining employment and a sharp drop in income. The mantra “there is no money,” which Milei preaches about the public coffers, extended to the pockets of the majority of citizens.
In the last year, from March to March, salaries in the public and private sectors showed an average increase of 200.8% according to Indec, while inflation for the period was 287.9%. The fiscal surplus is based on what the State stopped paying. The Congressional Budget Office (CPO) detailed that the lack of updating in relation to inflation implied a real decrease of 31.4% for pensions. Investment in public works sank 83.3% year-on-year and expenditures on social programs fell between 45% and 81%, depending on the case.
In this context, the recession spread and consumption plummeted. Indec’s Monthly Economic Activity Estimator recorded a fall of 8.4% for March in the year-to-year comparison. The most affected sectors were construction (a decrease of 29.9% year-on-year), manufacturing (19.6%) and wholesale and retail trade (16.7%). The drop in consumption was made explicit in sales in supermarkets: Indec detailed, for the January-March period, a drop of 11.5% compared to the same period in 2023.
The impact also reached employment. The labor indicators of the Ministry of Labor indicate that there have been four consecutive months of decline, with a loss of 1.4% in March. The most affected areas are construction and industry. In the first, 100,000 jobs disappeared between December and May, according to the Argentine Chamber of Construction.
To all this, in recent days the awakening of the dollar has been added. While the Government aspires to keep the official exchange rate regulated (today around 900 pesos for every dollar), in the informal market the currency has increased around 17% in ten days (it closed at 1,200 pesos). At the same time, the country risk has surpassed the barrier of 1,400 points.
Milei has tried to downplay the bad numbers and hold Congress responsible for not approving its basic law. But the beginning of the dollar’s rise has coincided with the Government’s decision to reduce the reference interest rate, which has caused a decrease in fixed terms in pesos. Added to this is a lower supply of foreign currency from exporters, who are waiting for a rise in the dollar to liquidate the harvest.
Milei’s measures accumulate criticism and not only from opposition sectors, but also from economists until recently close to the president. “From the risk of hyperinflation to hyperrecession,” Alfonso Prat-Gay, former Minister of Finance during the presidency of Mauricio Macri, one of the Government’s allies, has defined the current economic direction. Neoliberal economist Carlos Rodríguez, Milei’s advisor until last year, has warned that “what they are doing does not work.” And the consultant Diego Giacomini, the president’s former partner, has been lapidary: “These months are the best that the economic program can give. Milei is in a parallel reality.”
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