Argentina | President-designate Milei reaffirms an uncompromising liberal course

(Buenos Aires) Inflation “destroyed” within two years, privatizations in all directions, public media in the sights: the Argentine president-designate, Javier Milei, reaffirmed on Monday an uncompromisingly liberal economic course.

He assured that he “literally” did not sleep the night following his resounding victory, with 55.6% of the votes, against the outgoing Minister of the Economy, Sergio Massa. The foreign interlocutors called, “we had to work,” he explained.

The ultraliberal Milei, with his controversial positions, against abortion and even on climate change, spoke by videoconference with the former far-right Brazilian president Jair Bolsonaro, who warmly congratulated him, and announced that He would come to his inauguration on December 10.

The day before, he had received a congratulatory message from a “very proud” Donald Trump, to whom he is sometimes compared, but very rarely refers to in fact. Two months ago, however, he praised the former American president’s “defense of the ideas of freedom” and “the fight against socialism”.

At dawn, a combative Milei gave a series of radio interviews, reaffirming, and detailing a little, his determination to take a radical turn in the Argentine economy. In line with a victory speech where he warned: “no half measures”.

Overcoming chronic inflation, which at 143% over one year is exhausting Argentinians? “If we reduce monetary issuance today, this process would take between 18 and 24 months,” he estimated, wishing “to destroy it and bring it back to the lowest international levels.”

Tempering certain hopes – but also fears – the 53-year-old ultraliberal economist assured that he would not lift exchange controls immediately, otherwise “we would reach hyperinflation”.

Dialogue with the IMF

But Mr. Milei above all reiterated that his privatization program would be far-reaching: “Everything that can be in the hands of the private sector will be.”

He cited the oil giant YPF, nationalized in 2012 under the Peronist presidency of Cristina Kirchner. But also public media like the official Telam agency and TVP television, “which have become a propaganda mechanism”, he denounced in another interview on Radio Miter.

And he reaffirmed his desire to ultimately eliminate the Central Bank, through the dollarization of the economy. “The currency will be that which Argentines freely choose. Basically, you dollarize to get rid of the Central Bank. » He did not give a timetable.

Concerning the International Monetary Fund (IMF), to which Argentina is struggling to repay a $44 billion loan granted in 2018, Mr. Milei assured that his team “has been in dialogue with the people of the IMF for quite a while”.

IMF Director Kristalina Georgieva congratulated Mr. Milei on Monday and hoped to “work closely” with him on a plan capable of “protecting macroeconomic stability and strengthening inclusive growth for all Argentines.”

But the Fund’s adjustment program “is dead”, believes the new president, because according to him Argentina is well beyond the budget deficit objectives, “nearly 3% of GDP instead of 1.9%” .

This must be corrected “as quickly as possible”, and “we will start with a reform of the State, put the public accounts in order very quickly”, promised the man who, during his electoral rallies, regularly brandished a “chainsaw » against public spending.

“Inexorable” adjustment

“The adjustment must be done, inexorably, the big difference is that the “caste” made people pay for it, and we will make the “caste and its associates” pay for it,” he continued. advanced, in reference to the elite in power in recent years.

Monday being a public holiday in Argentina, it was difficult to assess the reaction of the markets to Mr. Milei’s victory and its impact in particular on the peso, by general opinion notoriously overvalued at 369 to the dollar at official rates ( three times more on the parallel market).

Until his inauguration, “the period will be more complicated, noisier” than if Mr. Massa, with a more predictable program from the point of view of the markets, had won, predicted economist Elisabet Bacigalupo, from the Abeceb firm.

Furthermore, seeking to reassure about the future of education and public health, Mr. Milei recalled Monday that they “cannot be privatized, because they are the responsibility of the provinces”, Argentina being a Federal state. On these subjects, he denounced a “campaign of fear” against him.

Not a word, however, on controversial themes, which Mr. Milei has avoided more and more recently: climate change – he believes that it is “not the responsibility of man” – or abortion, legalized in Argentina in 2021 – he is opposed to it, but does not consider turning back.

He finally indicated that he would travel “in the coming days” to the United States – Miami and New York – then to Israel, but on a private basis, before taking office.

Milei, an annoying neighbor for Lula’s Brazil

Brazil is worried about the election of Javier Milei as head of Argentina and fears that the ultra-liberal could scupper a deal between the European Union and Mercosur, although sources within Lula’s government are convinced that pragmatism will prevail between the two main trading partners.

The libertarian candidate, who beat the Peronist Sergio Massa on Sunday, threatened to withdraw his country from Mercosur (Argentina, Brazil, Paraguay, Uruguay) at a time when the latter is intensifying negotiations with the European Union to conclude a free trade agreement. exchange “as quickly as possible”.

On the bilateral level, Mr. Milei assured that if he became president, he would not meet Luiz Inácio Lula da Silva, whom he described as “corrupt” and “communist”.

The Brazilian head of state wished “good luck” to the new Argentine government on Sunday without mentioning the winner by name.

But his adviser, Celso Amorim, told AFP on Monday that Lula would not attend the Argentine’s inauguration ceremony on December 10 because he had been “personally offended”.

Marcelo Silva De Sousa, Agence France-Presse