Anyone who has been through Argentina for just a few days, or has some kind of relationship of trust with someone who lives there, can, without fear of being wrong, affirm that Argentina is an intense country. This historical intensity has had, in times of social media and post-pandemic, an acceleration that coexists with a new economic crisis that, dragged on for years without a solution, promises, whatever its outcome, to add another layer of excluded people to a country that It is slowly losing its middle class, although not its aspirations.
In this context, the presidency of Javier Milei in Argentina has marked a drastic change not only in internal politics, but also in the international perception of the country. Since his inauguration, and maintaining the confrontational, radical and disruptive approach of his campaign, Milei has implemented a series of profound economic reforms and has made political decisions that have further polarized Argentine society. Its “shock therapy” approach, reminiscent of the policies implemented during the 1990s in the country that led to the social and political crisis of 2001, includes significant cuts in public spending and economic liberalization measures, with the promise to profoundly transform the economic and social structure of the nation.
Milei has actively promoted deregulation, the shrinking of the state structure, and a move toward dollarization as solutions to combat inflation and stimulate investment. However, these measures have raised concerns among those who fear they could exacerbate income inequality and weaken the social safety net that many Argentines rely on. The significant devaluation of the peso has increased inflation, raising questions about the long-term viability of its economic model, even among orthodox economists, such as former Economy Minister Domingo Cavallo, who have publicly expressed concern.
Trade unions and social movements, traditionally strong and organized, have reacted adversely to what they perceive as an attack on labor rights and social security. The recent mobilizations, which have seen hundreds of thousands of people take to the streets, are a manifestation of this discontent. These are not only motivated by cuts and economic policies, but also by a general feeling that the Government is not addressing the needs of the most vulnerable sectors of society.
So far during Milei’s presidency, there have already been four social mobilizations that have spread throughout the country and have brought together a variety of protesters that go beyond those traditionally mobilized: on January 24, called by the Confederation General of Labor, on March 8 the mobilization of women, on March 24 in commemoration of the 1976 coup d’état, and the most recent Federal University March on April 23, which attracted attention for its transversality, convocation and presence of protesters not united under any flag other than the defense of public education and the scientific and technological system. The government’s response to these protests, which has been largely dismissive or confrontational, has only served to amplify the voices of protesters and further solidify the resistance.
At the political level, the lack of a majority in both chambers of the National Congress has led Milei to issue a mega Decree of Necessity and Urgency (DNU), which has been the subject of legal challenges and accusations of unconstitutionality, and the failure of the Law Bus, whose shortened and limited version will be discussed again this Monday with an uncertain destination.
Milei’s approach has also affected fiscal relations between the national government and the provinces, with cuts to discretionary transfers and investment in infrastructure and social spending deteriorating these relations. These challenges highlight the critical need to reform fiscal federalism in Argentina, an issue that has long been avoided, but is crucial for the country’s economic stability and social cohesion.
In this context, however, the social response to Milei’s policies is polarized. Polls have shown in the last two months that one party applauds his efforts to dismantle a system that they see as corrupt and inefficient, while the other expresses concern about the austerity measures and the apparent indifference towards the challenges faced by the poorest. A new chapter of the Argentine crack. The public appearances of the former President of the Nation, Cristina Fernández de Kirchner, in a context where social discontent does not find political representation, is perceived by some analysts as a vehicle to channel it. But there is an alternative view to this reading, which sees a limit in her figure and which helps keep alive the failure of the last Peronist government as the justification for the victory of the first liberal-libertarian president in history on November 19. of 2023.
Internationally, observers are watching Milei’s moves, wondering whether his presidency will bring a new era of prosperity for Argentina or push it toward greater isolation. This is, perhaps, the big question still unanswered.
A new Omnibus Law on the horizon
In this scenario, and while DNU 70/2024, which deregulates important dimensions of the national economy, remains in force (in parts, since some have been declared invalid by Justice), since Congress fails to build the agreements to cancel it. , the Government obtained the opinion last Friday, April 26, to discuss in the Chamber of Deputies a second version of the “Law of Bases and Starting Points for the Freedom of Argentines.” This new official proposal, more limited and negotiated than the previous one, declares some public companies subject to privatization and establishes reforms in the labor market, such as the extension of the trial period or the creation of a severance fund.
But the political scenario in the Argentine Congress is complex and challenging. Milei, despite her presidential victory, does not have a majority in either chamber of Congress, significantly complicating the approval of her ambitious legislative agenda. In fact, in neither of them does she have more than a third of the legislators.
The situation in the Chamber of Deputies is particularly fragmented. Milei’s coalition, La Libertad Avanza, although it has increased its representation through passes and agreements with other forces, especially with the hardest wing of the PRO, remains a small force within a broader spectrum of political parties. With the first minority maintained by the Peronist Unión por la Patria, followed closely by the parties that made up Together for Change, there is no bloc that has its own quorum. This means that, to move forward on any meaningful legislation, the Government must negotiate and form alliances with at least some of its opponents, which is a challenging task given the current polarization, ideological resistances, and not only defiant but many public demonstrations. times disrespectful of the current president towards those who do not show a martial alignment with his ideas.
In the Senate, the situation is equally complicated. Unión por la Patria becomes the first minority, and although it is close to reaching its own quorum with the support of provincial allies, Milei’s coalition is in an even weaker position than in the Chamber of Deputies. This further complicates Milei’s ability to push through deep reforms without making significant concessions to other blocs, which may have very different or even opposing agendas.
Although the Bases Law advanced in its process and finally reached the Senate, society, politics and the economy show signs of exhaustion and satiety, since the country is stuck in debates while inflation decreases, but all other economic indicators worsen, especially those that are linked to the daily life of citizens.
The recent street mobilizations at a crucial moment in the negotiations of the Base Law strengthened the most radical opposition and exhausted the patience even of those who until now had shown a willingness to collaborate. It is in this context where the vision is born that the appearance of the former president, instead of contributing to weakening the government, keeps the ghosts alive that allow us to move forward an economic situation that has no signs of improvement.
Argentina continues to face a precarious economic situation characterized by high inflation, recession and incipient signs of growing unemployment. The Government’s ability to stabilize the economy and improve the standard of living of citizens will be a decisive factor in the coming weeks, because in an intense country after years of crisis without solution, success or failure depends on hours and not months .
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