Javier Milei

Argentina, Milei's shock at the Parliament test

Javier Milei is ready to face his first important test with reality.
His shock agenda to deregulate the economy and transform Argentina arrives before Congress on December 29th.
At the time of the victory of the libertarian and anarcho-capitalist president, leader of La Libertà Avanza, his right-wing party, we wrote in these columns about the fact that the new head of state who took office last December 10th had to work to the test of facts with the constraints that the South American country must manage.
Starting from the monstrous public debt, high inflation and political fragmentation.
Milei's shock agenda Milei wanted to use an old mantra of neoliberal doctrine: the so-called "shock therapy".
Aware of having to quickly break ties and snares, decision-makers who intend to impose measures to open up economies are called to act quickly in the wake of the emotional wave dictated by crises and social fears for the established order.
The Shock Economy theorized by journalist Naomi Klein in the 2007 essay of the same name has been seen in action several times.
Between 1973 and 1974 in Chile, where Augusto Pinochet entrusted the American Chicago Boys with the neoliberal restructuring of the economy; in 1982-1983 in the United Kingdom, where the consensus given by Margaret Thatcher following the victory in the Falklands War was the driving force for the traumatic campaign of privatization and deregulation; in the early 1990s in post-communist Poland and Romania and in 2003 and 2004 in Iraq and Sri Lanka after the American invasion and the Indian Ocean tsunami respectively, based on the reconstruction of the countries in question and their economic systems .
For Milei, the shock is the dramatic situation Argentina finds itself in, today with 160% inflation and in recession.
Milei, an attentive scholar of neoliberal economic doctrines, combined urgency and direct action to immediately push to the Argentine Congress the maxi-decree with 664 articles regulating 300 measures that radically transform Argentine society by abolishing the regulatory provisions regarding the real estate market, the tariff and customs provisions on exports, social constraints on the destination of land ownership, restrictions on the aviation, healthcare, pharmaceutical and tourism markets to encourage competition.
Companies will no longer pay fines for failing to register workers and the state-controlled national airline, national media companies and energy group YPF will be divested and privatized.
The challenge in Congress All this, obviously, if Congress approves a law which, among other things, initiates a maxi-fiscal delegation giving the President absolute power in the legislative field over sectors such as taxes, pensions, energy and security until the end of 2025 Presidential decrees in Argentina enter into force directly on a provisional basis and remain so until both the Chamber of Deputies and the Senate definitively reject them or approve them, converting them into law.
Here Milei will have to have his first impact with reality.
The decree responds to all the principles of his libertarian party-movement, which however does not control the majority alone.
Milei's party in the Chamber is allied with Republican Proposal, the center-right party of Security Minister Patricia Bullrich, and with the liberal centrists of the Radical Civic Union.
40 seats each for the first two parties, 34 for the third for a total of 114 seats compared to 129 needed for an absolute majority.
The Peronist opposition centered on the Justicialist Party controls 107 seats.
However, those controlled by it in the Senate out of 72 are 33, against the 26 of the presidential majority.
The centrist swamp that can slow down Milei The decisive factors therefore remain the 36 votes in the Chamber and 13 in the Senate of the centrist coalitions and second-line parties.
Among which, however, stand out socialist, Christian-democratic, Peronist formations not linked to the Kirchner family, non-liberal centre-right and regionalist groups from areas such as Misiones and Rio Negro.
A "grey" mix that will be decisive for Milei, provided that his majority is compact and that the majority partners, less unbridled in their privatization and liberalization frenzy, follow him to the end.
“Shock” as a doctrine and the myth of implementing a political agenda in the infamous first “hundred days” of a presidency, for Milei, clash with the rules of Argentine democracy.
Which, considering the reaction to the street protests in the first days of his mandate, have demonstrated several times that they are close to the volcanic new president, ready to call a referendum if the proposal is rejected.
But perhaps he could be called upon to make concessions and softening to see the package promoted and not rejected.
From these perspectives we will understand the political capacity of Milei, a maximalist in tone and actions called to understand how to have the best possible impact on reality.

Author: A.W.M.

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