BUENOS AIRES, Argentina (AP) — When interviewed about his plans after his shock election victory last fall, Argentina’s next president said: Javier Millay He immediately gave the go-to answer: “To combat inflation.”
“After that…” he trailed off, as if looking for something else important. “It’s life,” he said with a shrug.
driven by a single-minded obsession with cut spending to reduce inflation — now approaching 300% — the former TV commentator with just two years of parliamentary experience made it clear from the start that he had little interest in anything else. economic deregulation.
But his all-or-nothing approach has left the impatient libertarian economist unable to achieve any legislative results 142 days into his presidency, promising to save Argentina from its worst economic crisis. Questions have arisen as to whether a free market revolution can be implemented. 20 years.
Mr. Millais, who stands up against the “kleptocratic politician”, encounter resistance from Argentina’s flammable parliament, which he calls a “rat’s nest”; His proposals have been rejected by his political opponents, whom he calls “parasites”. And he has struggled to win the support of disgruntled governors after he reportedly threatened to “upset” them at a meeting last month.
But experts say Milley is now plotting to abandon some of her campaign promises and secure enough other priorities to claim victory.
“He was rapidly schooled in Machiavellian play,” said Christopher Ecclestone, a strategist at investment bank Hallgarten & Company. “He’s now using carrots and sticks to get what he wants.”
Indeed, he got what he wanted when Argentina’s House of Representatives voted on Tuesday to approve a significantly scaled-down version of Millais’ economic reform package, known as the omnibus bill. The Senate still needs to approve the bill. A crowd of protesters gathered outside parliament.
“Ending 100 years of decadence will not be easy, but together we will challenge the status quo,” Millais said in a rare message of solidarity after the vote.
Let’s take a look at the bill that received initial approval and what it means for Argentina and its self-proclaimed “anarcho-capitalist” leaders.
Did Millay achieve her goal?
Milley’s first act as president was to issue an emergency decree that allowed him to push through hundreds of dramatic changes without Congressional oversight.
In just a few months, Millay devalued the Argentine peso by 54%, eliminated price controls on food and rent, froze all public services, halved the number of federal ministries, and reduced government revenue transfers to the states. , reduce fuel and transport subsidies, laid off 15,000 state employees.
Millay claimed last week that Argentina had entered a “new era of prosperity” after it recorded its first quarterly budget surplus since 2008. He stabilized the peso’s black market exchange rate after months of free depreciation. Bond prices rose.
But that’s little consolation for poor, middle-class Argentines They struggle to make ends meet as prices rise and the value of wages falls. More than 40% of Argentines currently live below the poverty line. Community kitchens say they’re overwhelmed.
“I can’t afford to buy clothes for my son, so I have no choice but to ask for donations,” said Alicia Martinez, 37, who lives in Villa 31, a poor neighborhood in central Buenos Aires. She said, “I don’t know how much longer I can hold out.”
What has happened to his law so far?
Milay may have won last November’s run-off with 56% of the vote, but experts say Argentina has not had this much influence in parliament since the fall of Argentina’s military dictatorship in 1983. Point out that there is no president.
“He is institutionally the weakest president in Argentina’s history,” said Ana Iparaguirre, a partner at the Washington-based political strategy firm GBAO.
The liberal party Freedom Advances, founded in 2021, only holds 15% of the seats in the House of Representatives and 10% of the seats in the Senate. None of Argentina’s 23 powerful provincial governors, who are key to legislative support, are allies.
Millais is fighting two battles in Congress. One is over the emergency legislation, and the other is over the underlying omnibus bill.
Last month, Argentina’s Senate repealed the executive order on the grounds that it violated the constitution. This Decree remains in effect until rejected by the House of Representatives. However, some judges have already been suspended. The legislature deregulates the labor market in response to union petitions.
On Tuesday, the omnibus bill cleared its first hurdle. However, the 232 articles that passed are fundamentally different from Millais’s original version of 664 articles.
rear Opposition MPs rejected key proposals earlier this year, Millais softened her tone and entered weeks of negotiations with mainstream right-wing and centrist parties. Ultimately, he was forced to repeal the bill’s most controversial elements.
What does this omnibus bill include?
The omnibus bill remains divisive as it would give Millais vast legislative powers in areas such as energy, taxes, pensions and security.
But the abolition of automatic membership fees, a measure that could have bankrupted Argentina’s powerful trade unions, has been scrapped. Gone are the most extreme privatization plans, such as selling Argentina’s state-owned banks and its largest oil company.
Mr. Millay made further concessions, agreeing not to abolish certain state institutions from which he had cut off most of their funding, including Argentina’s National Film Institute and a leading research institute. To win the support of the cash-strapped governor, Mr. Milley lowered the salary threshold for his income tax.
“He claims to be an uncompromising radical thinker, but he is perfectly capable of compromise when the time comes,” said Eugenia Mitchelstein, associate professor of political science at San Andres University in Argentina. says. “His 100-day honeymoon is over…He needs this law passed.”
Why is this bill important?
So far, Millais has been pushing for a state overhaul in small ways. roaring chainsaw.
The International Monetary Fund expects Argentina’s economy to contract by 2.8% this year. Companies are laying off people. Argentines are cutting back on spending, raising fears of an economic recession.
Millay is betting that foreign investment can help Argentina transform. But first, he needs to show investors and the IMF, to which Argentina owes $44 billion, that he can govern, said Lucas Romero, head of the consultancy Synopsys.
Economy Minister Luis Caputo seemed to recognize this in his remarks to businessmen at the Buenos Aires Stock Exchange on Monday.
“Our economic recovery depends on how well we can persuade you,” he said.
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Associated Press writer Almudena Calatrava contributed to this report.
