On Sunday, the 10th of December, Javier Milei, the Argentine far-right leader took office as President, warning in his first speech that a rapid and painful fiscal shock was needed to tackle the country’s severe economic crisis, with inflation approaching 200%. Milei stressed the need for drastic changes, admitting that “there is no money”, reports Reuters.
Argentina elected Milei as President on the 19th of November, by a larger margin than expected. He takes over from Peronist leader Alberto Fernandez, whose government failed to curb soaring prices.
Despite concerns about some of his radical ideas, voters who backed Javier Milei in the second round of the November elections expressed their willingness to take a chance on his leadership. Many see him as a last hope in the face of dissatisfaction with the previous government and the economic crisis.
Argentina’s new President Javier Milei faces serious challenges,
including negative net foreign currency reserves, soaring inflation, a looming recession and capital controls affecting the exchange rate. Milei seeks to address these challenges through fiscal adjustment, eradicating inflation and managing a significant debt burden. In his speech, he outlined a plan for a fiscal adjustment of 5% of GDP, focusing on reducing public spending rather than the impact on the private sector.
To tackle Argentina’s economic problems, the President has appointed the well-known politician Luis Caputo as Economy Minister and Santiago Bausili as Chef of the Central Bank.
Reuters writes that, despite his radical ideas in the past, Milei has shown a more moderate approach in recent weeks and is expected to focus on pragmatic measures to stabilise Argentina’s economic situation.
In addition, he has already started to fulfil one of his campaign promises
by announcing that he has signed a decree halving the number of ministries from 18 to nine.
At his inauguration ceremony, Milei pledged to put Argentina back on the path of prosperity and “make Argentina great again”, adapting the slogan of former US President Donald Trump.
“It is clear that in the short-term things will get worse, but afterwards we will see the fruits of our efforts,” according to Reuters said Milei, adding that tough decisions have to be taken for the country’s future.
The event was attended by international leaders, including Ukrainian President Zelensky and Hungarian Prime Minister Orbán, who had a brief and “frank” conversation on European issues, as Zelensky said in his video address, writes Reuters.
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