“There is no money”: the new ultraliberal president Javier Milei announces an austerity “shock” to Argentina

Ultra-liberal Javier Milei became president of Argentina on Sunday, announcing an inevitable “shock” of austerity, and immediately warning that the economic situation in the country will “get worse” in the short term. “There is no alternative to an adjustment, there is no alternative to a budgetary shock”, because “there is no money!”, launched the president of the Argentina, Javier Milei with 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 in an offensive speech, promising “all the necessary decisions to resolve the problem caused by 100 years of waste from the political class”, and “the worst legacy” never received by a government. In front of him, a sea of ​​sky and white, of Argentinian flags and jerseys of the selection mixed together, 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 40 years ago, swearing before parliamentarians to honor "with loyalty and patriotism" the office of president, then donning the sky and white presidential sash. He also received the traditional custom-made scepter for each president, in his case engraved on the pommel the mouths of his five English mastiff dogs - "his children", as he calls them. In barely two years, the outsider Milei, an economist known for 6-7 years as a popular polemicist on TV, has overturned Argentine politics. Elected deputy in 2021, he swept aside the Peronist (center-left) and right-wing blocs, which had alternated in power for 20 years, with a clear message.

On November 19, he scored a resounding victory in the presidential election against the outgoing centrist Economy Minister, Sergio Massa, with 55.6% of the vote. 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. After his speech, punctuated by his favorite slogan “Viva la Libertad, carajo!” (Long live Freedom, damn it!), Milei, with her sister at her side - who will be secretary general of the presidency - Karina, 50, traveled in a convertible the 2 km from Parliament to Casa Rosada, the presidency, sometimes stopping to meet the crowd. From the balcony of the presidency, he later greeted the crowd with a characteristic roar: “Hello everyone, I am the lion!”, borrowing a few lines from an Argentine hard-rock tune. But he repeated that “if we are going to have to go through a difficult period, we will overcome it”, launching a “Let's make Argentina great again!”, with Trumpian accents.

In the crowd gathered throughout the day, the Argentines, sometimes coming from very far away in the country, Mendoza, Tucuman, hailed Milei as the incarnation of “a 180 degree turn, and a glimmer of hope”, as enthused Ariel Carabetta, a 42-year-old trader. Uncertainty remains regarding the very first measures: devaluation of the notoriously overvalued peso? First budget cuts, notably public worksites? Restriction or even ban on monetary issuance? On Sunday, he 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 and January.

Milei himself warned that inflation will not be brought under control for “18 to 24 months.” Will Argentinian wallets still be able to handle it? Many on Sunday said they were ready, even “if it’s going to be hard”, to “give him time”. “Of course the adjustment will impact us all. But we have to face the grapeshot. We are there and we need courage,” indicated Ana Avellaneda, a 50-year-old lawyer. Remaining off-screen, for the moment, are the more controversial positions of candidate Milei: his opposition to abortion, legalized in 2021, or his denial of climate change as “man's responsibility”.

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. Zelensky recently thanked Milei for his “clear support” for Ukraine. 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. After the swearing in of nine ministers - a restricted government, austerity promised by Milei - the inauguration day was to end with an interreligious service, then a show at the prestigious Teatro Colon.