BUENOS AIRES, Argentina (AP) — When interviewed about his plans after a shock electoral victory last fall, Argentina’s President-elect Javier Milei gave his go-to answer in a blink: “To exterminate inflation.”
“After that …” he trailed off, as though searching for anything else that could possibly matter. “Life,” he said, shrugging.
Driven by a single-minded obsession with slashing spending to tame inflation — now nearing 300% — the former television commentator with just two years’ experience in Congress made clear from the start he had little interest in anything but economic deregulation.
But the all-or-nothing approach has left the short-tempered libertarian economist without a single legislative achievement 142 days into his presidency, raising questions about whether he can pull off his promised free-market revolution to rescue Argentina from its worst economic crisis in two decades.
Milei, who ran against “thieving politicians,” has run into resistance from Argentina’s combustible Congress, which he calls “the rat’s nest.” His proposals have been rejected by political rivals, who he calls “parasites.” And he is struggling to win over disgruntled governors, who he reportedly threatened to “piss on” in a meeting last month.
But now, experts say, Milei is wising up to the game, giving up some campaign promises while maneuvering to secure enough other priorities to claim victory.
“He has had a rapid education in Machiavellian operations,” said Christopher Ecclestone, a strategist with investment bank Hallgarten & Company. “He’s now using carrots and sticks to get what he wants.”
On Tuesday lawmakers — and protestors — converged on downtown Buenos Aires as the lower house continued debating a dramatically downsized version of Milei’s economic overhaul package, known as the omnibus bill.
Here’s a look at the bill being discussed — and what it means for Argentina and its self-proclaimed “anarcho-capitalist” leader.
HAS MILEI ACHIEVED ANY OF HIS GOALS?
The first thing Milei did was crank out an emergency decree that allowed him to ram through hundreds of dramatic changes without Congressional oversight.
In just a few months, Milei devalued the Argentine peso by 54%, removed price controls for food and rent, froze all public works projects, halved the number of federal ministries, slashed government revenue transfers to provinces, cut fuel and transportation subsidies and laid off 15,000 state workers.
Milei claimed “a new era of prosperity” last week when Argentina logged its first quarterly fiscal surplus since 2008. He stabilized the peso’s black market exchange rate after months of free-fall. Bond prices climbed.
But that’s little comfort to poor and middle-class Argentines struggling to scrape by as prices rise and wages lose value. Over 40% of Argentines now live below the poverty line. Community kitchens say they’re overwhelmed.
“I am forced to ask for donations because I can’t afford clothes for my son,” said 37-year-old Alicia Martinez in Villa 31, an impoverished neighborhood in central Buenos Aires. “I don’t know how much more I can take.”
WHAT HAS HAPPENED TO HIS LAWS SO FAR?
Milei may have won the run-off election with 56% vote share last November, but experts say no Argentine president has had less clout in Congress since the 1983 fall of Argentina’s military dictatorship.
“He is the weakest president in institutional terms that Argentina has ever seen,” said Ana Iparraguirre, partner at Washington-based political strategy firm GBAO.
Founded in 2021, his libertarian party, Freedom Advances, holds just 15% of seats in the lower house and 10% of the senate. None of Argentina’s 23 powerful provincial governors — who hold keys to legislative support — are allies.
Milei is fighting two battles in Congress — one over his emergency decree and the other over his cornerstone omnibus bill.
Argentina’s senate struck down the decree last month on the grounds it was unconstitutional. The decree remains in force until the lower house rejects it. But some judges have already suspended legislative chapters deregulating the labor market following union petitions.
The omnibus bill hasn’t fared much better. The lower house approved in general terms a watered-down version of the original 664-article bill in February. But opposition lawmakers rejected key proposals, prompting Milei to withdraw the whole thing.
Moderating his tone, Milei entered weeks of negotiations with mainstream right-wing and centrist parties — and emerged with the even more scaled-back bill being debated in the lower house.
WHAT’S IN THIS OMNIBUS BILL?
The omnibus bill remains controversial in granting Milei vast legislative powers in energy, tax, pensions, security and other areas.
But gone are the measures that could have bankrupted Argentina’s powerful trade unions by eliminating automatic dues. Gone are the most extreme privatization plans that would have sold off Argentina’s national bank and largest oil company.
In further concessions, Milei agreed he wouldn’t eliminate certain state agencies he has largely defunded, like Argentina’s national film institute and leading research body. To win over cash-strapped governors, Milei lowered salary thresholds subject to income tax.
“He presents himself as an uncompromising radical thinker but when push comes to shove, he is perfectly able to make compromises,” said Eugenia Mitchelstein, associate professor of politics at Argentina’s University of San Andrés. “His 100-day honeymoon has come and gone … He needs this law to pass.”
WHY DOES THIS BILL MATTER?
Milei’s has powered his overhaul with little more than budget cuts by decree.
The International Monetary Fund expects a 2.8% economic contraction for Argentina this year. Businesses are firing. Argentines are cutting back on consumption, stoking fears of a recession.
Milei is betting foreign investment can help Argentina turn the corner. But first he needs to show investors — and the IMF, to which Argentina owes $44 billion — “that he can govern,” said Lucas Romero, who leads the consultancy Synopsis.
Economy Minister Luis Caputo seemed to recognize that during his remarks Monday at the Buenos Aires Stock Exchange addressed to businessmen.
“Our economic recovery depends on how successful we are in convincing you,” he said.
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Associated Press writer Almudena Calatrava contributed to this report.
