It didn’t take long for the mask to slip. On 10 December, the day of his inauguration, Argentina’s new president, Javier Milei, released the first official photograph of his government, which has been slimmed down to just nine ministries (from 20 under his predecessor Alberto Fernández): human capital, infrastructure, economy, justice, security, defence, health, foreign affairs and the interior.

Argentinians saw two familiar faces in the line-up: the new economy minister, Luis Caputo, who was secretary of state and then finance minister in Mauricio Macri’s government (2015-19). And Patricia Bullrich, who returns to the role of security minister, which she held under Macri. The often stern-looking Bullrich was smiling broadly in the photo: though defeated in the first round of the presidential election (in which she stood for the conservative coalition party Juntos Por El Cambio (Together for Change)), she had secured a government job through an alliance with her former rival.

Milei’s team looks rather conventional for someone who ran for the presidency as the ‘anti-system’ candidate, promising a break with the political ‘caste’. In reality, under Milei, ‘the caste is in power,’ says political scientist David Copello, who also points out the private sector background of several cabinet members. Nicolas Posse, Milei’s chief of staff, and Mariano Cúneo Libarona, the new justice and human rights minister, both worked for Corporación América, the financial and media conglomerate owned by Eduardo Eurnekian, a prominent billionaire businessman to whom Milei was once economic advisor. The economist-president took his first steps into the limelight in 2016 on the television discussion programme Animales Sueltos (Animals at Large) on Eurnekian-owned América TV.

‘Milei isn’t anti-caste; he’s anti-Kirchnerist,’ says Gabriel Vommaro, professor of political sociology at the National University of San Martín (UNSAM), in the sense of rejecting the policies of the governments of Nestor Kirchner (2003-07) and Cristina Fernández de Kirchner (2007-15). Basically, Vommaro says, Milei’s first measures ‘are like other economic liberalisation programmes in Argentina’s history’, such as the neoliberal governments of Carlos Menem (1989-99) and Mauricio Macri.

Neoliberal austerity

These measures boil down to two things: austerity and economic liberalisation. On 12 December, following a more than 50% devaluation of the peso, Caputo announced massive spending cuts of around $20bn, or 5% of GDP, mainly by slashing subsidies for public transport, electricity, gas and water. This adjustment will fall ‘almost entirely on the state and not on the private sector’, Milei declared proudly in his inauguration address.

Ten days later, Milei announced an emergency decree introducing 366 reforms intended to ‘deregulate business, services and industry throughout the national territory’. The press took to calling it the decretazo (mega-decree). It will end, among other things, state controls of rents, top-up health insurance charges, prices of essential goods, and internet services (opening the door to Elon Musk’s Starlink company). It also makes privatisations easier and employment laws laxer: the probation period for all new jobs increases from three to eight months and severance pay is significantly reduced.

If Milei is an innovator, it’s in the brutality and speed of these changes, says Vommaro: ‘No previous government has dared implement so many reforms without going through Congress.’ While Macri took a gradualist approach to avoid popular rebellion, Milei has chosen shock tactics. ‘To do things gradually, you need money. Unfortunately, I must repeat: there is no money,’ he said in his inaugural address (1).

Yet, following his victory, international press headlines reassured readers that, since he lacks a majority in Congress, Argentina’s ‘libertarian’ (2) president would have to moderate his behaviour. Although his party, La Libertad Avanza (Liberty Advances), won 56% of the vote in the second round of the presidential election on 19 November against the Peronist Sergio Massa, it only secured 38 of the 257 seats (15%) in the Chamber of Deputies and seven of the 72 seats (10%) in the Senate. ‘To pass difficult reforms, Milei will need the support of Congress,’ wrote The Economist on 23 November 2022. ‘He will have to negotiate with Juntos por el Cambio, a centre-right coalition, and with moderate Peronists’ (3). The Financial Times was reassured by Caputo’s appointment to the economy portfolio, taking it as a sign that Milei was ready to set aside his maverick ways and become a proper head of state. The neoliberal press is often happy to overlook authoritarianism when it serves the markets.

In reality, Milei had no intention of making concessions on his programme. The tone was clear from his inauguration: symbolically, he delivered his first speech with his back to Congress. Then, on 27 December, a week after signing the decretazo, he introduced his ‘omnibus bill’ which, in addition to further privatisations (41 public companies including the oil giant YPF and the airline Aerolíneas Argentinas), grants full power to the executive.

Emergency legislation

The bill, which contains 664 clauses, declares ‘a state of emergency in economic, financial, fiscal, administrative, social security, tariff, health and social matters until 31 December 2025’. It authorises the executive to govern by decree at least until the end of 2025, and possibly until the end of his term, as the ‘emergency’ can be renewed once for a further two years.

The new law, supposedly ‘defending freedom and Argentinians’, curtails their right to demonstrate. It classes any gathering of more than three people as a demonstration, which must be reported to the authorities at least 48 hours in advance. If the demonstration impedes freedom of movement or the provision of public services, the law authorises penalties of up to six years in prison for participants and organisers. ‘We have not seen such a measure since the dictatorship,’ says Jorge Sola, the spokesperson for the General Confederation of Labour (CGT), Argentina’s main trade union federation.

Congress, which scrutinised every article in the ‘omnibus law’ during extraordinary sessions held throughout January, may still reject it. Several articles, especially those seeking to reform the political system, require an absolute majority. The implementation of the decretazo may also be blocked by a parliamentary majority before the end of its special session on 15 February.

For now, Milei’s authoritarianism has elicited little reaction in Argentina’s political sphere. ‘The opposition is destabilised and hiding under the bed,’ says Juan Grabois, president of the leftwing Patria Grande front, who ran in this Peronist party’s presidential primaries against the centrist Sergio Massa. ‘It doesn’t talk to the media; it doesn’t have a clear parliamentary strategy. There’s no cross-party union to defend democracy against the threat to the republican order.’

The CGT, unable to rely on Congress, has appealed to the National Labour Court, the body overseeing Argentine labour law, to challenge the constitutionality of some aspects of the decretazo. ‘We had no other option,’ explained Sola, who during our interview on 3 January, received news that the judges had decided to temporarily suspend the part of the decree relating to labour rights, questioning whether there was a genuine state of emergency.

A victory? ‘Not yet,’ Sola said. The National Labour Court’s final decision remains uncertain: it is yet to undergo legislative scrutiny. And shortly after Sola got the message, the government announced it would appeal. Furthermore, as evidenced by the judicial harassment of the former leftwing president Cristina Fernández de Kirchner intended to prevent her possible return to power, the Argentine justice system does not always side with the law.

Popular protests to come?

Researcher Pablo Semán believes resistance to Milei will come not from institutions but from popular protest. Not for the first time: in 2001 the Menem government’s neoliberal policies triggered an unprecedented economic crisis. Thousands of people then took to the streets, banging pots and pans and demanding the whole government resign. Menem’s successor, President Fernando de la Rúa (of the centrist Radical Civic Union) and economy minister Domingo Cavallo bowed to this pressure and fled office by helicopter on 20 December 2001.

But these mobilisations left 39 dead and several hundred injured. ‘When politicians don’t do their job, it’s always the poor who end up paying with their blood in the struggle,’ says Grabois, who took part in the 2001 unrest and was detained by law enforcement.

Is history about to repeat itself? Anger is already brewing. ‘Less than 30 days have passed [since Milei took office] and social discontent is already visible,’ according to Sola. A survey by the Centre for Public Opinion Studies (CEOP) suggests his popularity had already dropped by six percentage points by December 22, just 12 days after his inauguration.

While he managed to win working-class support with promises of ending the inflation that impoverished them under the Macri and Fernández (2015-19) governments, Milei’s ‘liberal revolution’ seems for now simply to be making everything worse.

In December inflation climbed another 25%, reaching an annual rate of 211%. There is no reason to believe it will fall in coming months. ‘Milei has no plan to reduce Argentina’s debt [incurred by Mauricio Macri’s government with the IMF], which is the main cause of inflation,’ says lawyer Carlos Maslatón, one of the country’s leading neoliberals and former Milei adviser. Repayments on the $44bn that the country owes the IMF (4) is putting pressure on its weak dollar reserves, forcing it to obtain greenbacks by increasing exports, which erodes the value of the peso. On 18 October 2023 Fernández’s government had negotiated a currency swap agreement with China to obtain $6.5bn for loan repayments. Following candidate Milei’s promises to make a diplomatic break with ‘communist’ China, Beijing suspended the mechanism on 20 December. Chinese president Xi Jinping was unmoved by Milei’s letter of contrition sent a week earlier, begging him to maintain his financial support.

So where will the dollars come from? For Milei, letting the IMF down is not an option. ‘I have been very clear, the debt will be paid,’ he insisted on 14 September, after a meeting with IMF representatives during his presidential campaign. The IMF was delighted: on 11 January, untroubled by the new president’s authoritarian drift, it congratulated him on his ‘speed’ and ‘determination’ (5).

Following the announcement of the mega-decree, the CGT called for a first mobilisation, which brought some 25-30,000 people onto the streets of the capital. Sandra Pettovello, minister for human capital, immediately threatened to suspend the benefits of protesters who blocked the streets; and government spokesman Manuel Adorni promised to make ‘social movements’ ‘pay the bill’ for deploying 5,000 police and gendarmes. Despite these attempts at intimidation, the CGT remains unbowed.