The self-proclaimed “anarcho-capitalist” Javier Milei becomes the new president of Argentina. He wants to massively cut social spending and introduce the US dollar. But can he even do that?
Aus Buenos Aires Tobias Buyer
At midnight the big party took place at the world-famous obelisk. Where Argentinians celebrated victory in the World Cup almost a year ago, thousands of mostly young people now gathered to celebrate the libertarian economist’s electoral triumph Javier Miley to celebrate.
➤ More on this: “Anarcho-capitalist” Milei wins runoff election in Argentina
Chants of “Libertad, Libertad” (“Freedom, Freedom”) could be heard. And then something amazing was observed: the young demonstrators began to clear away their own garbage. “We want a better Argentina,” shouted one of the celebrants. “We want him to put the country in order,” says Fernanda (19), who takes selfies from the historic night with her friends. “Something has to change. We need a future again.”
The Milei voter sums up the core message of the election evening: Young Argentines in particular have given the economist Javier Milei the task of tackling the economic restructuring case.
Victory against “super minister” Sergio Massa
With annual inflation of 143 percent and a poverty rate of 40 percent, the incumbent left-wing Peronist government is handing over to President Alberto Fernandez and its predecessor Cristina Fernández de Kirchner the country was in an economically catastrophic state on December 10th.
The attempt to deal with the “super minister” who was substituted at short notice over a year ago Sergio Massa (Finance and Economics) to save power as presidential candidates failed. Milei (55.69 percent) was almost eleven points ahead of Massa (44.30 percent), achieving more success than most survey institutes predicted.
Milei wants to introduce the US dollar as the national currency, but does not want to abolish the central bank
On Monday – a public holiday in Argentina – there were already the first signs from Milei’s environment: state media such as the news agency, which was previously close to the government WEB or public TV should be privatized just like the natural gas and oil companies YPF. “Everything that can be in the hands of the private sector will end up there,” people familiar said on Monday. Milei wants to massively reduce government spending in order to reduce the budget deficit.
The self-proclaimed “anarcho-capitalist” wants to de-bureaucratize the state and economy and privatize them as much as possible. He wants that Weight abolish and through the US-Dollar replace, cut social security contributions and reduce taxes. To symbolize the radical cuts, he held up a chainsaw several times during the election campaign. The Argentines gave him democratic legitimacy for this painful journey.
With a view to the abolition of the central bank, which was repeatedly called for during the election campaign, Milei has already rowed back. On Monday, the formulation of a “reorganization” of the central bank made the rounds for the first time. He also doesn’t want to affect the education and healthcare systems.
US dollars in Argentina? “That’s almost impossible”
The most controversial project therefore remains dollarization. Sebastian Menescaldi deputy director of the financial advisory firm EcoGo told Argentine media before the runoff that the plan would be “almost impossible because the central bank doesn’t have U.S. dollars.”
Financial expert Eugenio Marie Thomsen from the foundation „Freedom and Progress“ (Freedom and Progress) in Buenos Aires In an interview with the KURIER, he still believes structural reforms are absolutely necessary: “If there is no change in course, Argentina runs the risk of hyperinflation breaking out in 2024. This would increase the poverty rate to over 60 percent. And of course this would lead to a severe recession.”
Pro-Western foreign policy orientation
In terms of foreign policy, Milei offers himself as a partner to the West: “I see Argentina on the side of the USA, Israel and the free world,” said Milei. The election winner cannot be easily sorted into political categories. At the beginning of the election campaign he said to the KURIER: “For me, individual freedom, the protection of private property and free trade are the central elements of my politics.”
The first talks between President Fernández, who is still in office, and his successor took place on Monday. So far, Milei has been able to criticize the country’s economic policy from the comfortable position of a verbal attacker. From mid-December he has to prove that his ideas actually lead to success.