Argentina’s newly inaugurated President, Javier Milei, delivered a stark warning to citizens, urging them to brace for austerity measures as the country grapples with soaring inflation and economic challenges. In his address to thousands of supporters from the steps of Congress, Milei emphasized the urgent need for spending cuts and economic reform, attributing the current crisis to the overspending of previous administrations.
The 53-year-old libertarian, known for his unconventional campaign tactics, including wielding a chainsaw as a symbol of spending cuts, declared, “There is no money,” underscoring the severity of the economic situation. Argentina, Latin America’s third-largest economy, is burdened by decades of debt, financial mismanagement, with alarming annual inflation at 140%, and 40% of the population living in poverty.
Milei likened his election to a historic turning point, comparing it to “the fall of the Berlin Wall.” He advocated for “shock treatment” as the only solution for the ailing economy, acknowledging that short-term hardships might ensue but expressed optimism about the long-term positive outcomes of their efforts.
Amid promises of significant spending cuts, equivalent to five percent of the Gross Domestic Product (GDP), Milei emphasized the need for drastic measures in a country accustomed to welfare handouts and substantial subsidies. His symbolic chainsaw made its mark on the cabinet, reducing the number of portfolios from 18 to nine during the swearing-in ceremony.
Milei’s ascent to the presidency completes a rapid political rise for the former television panelist who entered politics just two years ago. Despite his initial radical stances, including plans to “dynamite” the central bank and adopt the US dollar, Milei has softened some positions since his election. He has formed alliances with politicians he previously criticized, highlighting the complexities of governance in Argentina.
The coming days will be crucial for Milei, with questions lingering about potential devaluation of the tightly controlled peso and the loosening of currency controls. Economists and citizens alike await tangible steps to address the money printing by the Central Bank of Argentina, a practice criticized by Milei.
As Argentina faces economic challenges and a contraction projected by the International Monetary Fund (IMF), Milei’s presidency is seen by some as the beginning of a new era. However, the complexity of rebuilding the country and achieving economic stability remains a significant undertaking.