Buenos Aires, Tuesday, five o'clock in the afternoon. Paola Orellana, a 51-year-old hairdresser, colors the hair of the only customer in the shop. She turned on the television in the corner, increased the volume and now warns the second customer who comes in: “I turned it on to hear the commercials.” Argentina is eagerly awaiting the package of measures that the new government will introduce Javier Milei will announce two days after their arrival at Casa Rosada. On the steps of Congress on inauguration day, right-wing extremists said he had begun a “new era” in the country and many want to know what the Argentina they were promised will look like. The intended transformation began this week with a devaluation of the currency that drove up prices but did not change markets, and a protocol to suppress protests that unions have already announced.
Milei's first week as president started a little late. The ultra-liberal arrived at Casa Rosada on Monday for his first cabinet meeting. No major economic announcements were made that day and the central bank decided to hold a virtual stock market holiday. Milei later attended the Jewish Hanukkah celebration and it was the only time in the entire week that he spoke publicly. “We know that at this moment the forces of heaven will support Argentina and Israel,” said the new president, who is Catholic but has studied the Torah for years and shown his allegiance to the Jewish state.
The plan also did not arrive as planned on Tuesday at five in the afternoon. Economy Minister Luis Caputo appeared two hours later in a recorded message to announce the new government's first 10 economic measures. Some of the policies: devaluation of the currency by 50%, paralysis of public works, reduction of energy and transport subsidies, reduction of the state workforce, increase of withholdings on exports… The Decalogue proposes a sharp adjustment and the increase of taxes According to the forecast According to the government, inflation will be 20 to 30% monthly. It does not provide for income equalization and only improves two social benefits that reach part of the 40% of the population who live in poverty.
The most visible consequences became apparent just 24 hours after the announcement. The markets reacted calmly. Sovereign risk fell and the blue dollar, which circulates illegally and is considered a thermometer for the local economy, traded at 1,070 pesos per US unit, up just 7% from the previous day. As the days went by, the parallel currency continued to fall and the exchange rate gap narrowed to 25%. But prices skyrocketed. Dealers across the country received messages from their suppliers announcing price increases of up to 175% in some cases; the material yards for the work stopped selling supplies; a kilo of meat cost 40% more; The oil company Shell increased fuel prices by 37%; Aerolíneas Argentinas, the leading airline, has adjusted ticket prices by 100%.
A customer at a store in the Argentine capital watches the televised message from Economy Minister Luis Caputo on Dec. 12. Anita Pouchard Serra (Bloomberg)
Prices dominated conversations on the streets of Buenos Aires. A man sent an audio message to his wife on Thursday, 48 hours after the announcements: “There are no prizes until the afternoon.” Two women on the sidewalk could not agree on the value of the goods. “I bought a sweet bread, two kinds of milk, an oil, a bag of rock candy and an alfajor and spent 5,000 pesos,” one said, and the other replied, “Compared to what I spent, it doesn’t seem like that much in the perfumery.” A woman vented to a dealer: “That’s abuse, that’s stressful.”
The provincial newspapers also commented on the news. In Río Negro, Patagonia, it was reported that construction of “1,230 houses and 26 planned schools” would be halted. In Misiones, in the country's tropical northeast, it said the tourism sector, one of the province's most important, remained “on alert” in light of the measures announced. In Córdoba or Santa Fe, in the center of the territory, agribusinesses were divided between criticism and support.
The economics minister, named person of the week by the media, gave some details about the package in his first television interview, because details were missing – and are still missing. In the following days, he also warned that dollarization and central bank closures “remain a warning sign.” The rest of the government was virtually silent. Milei continued publicly without saying a word, although she expressed positive reactions to the guidelines on social media. Minister Sandra Pettovello, head of the Ministry of Human Capital, also did not comment when the first questions about the adjustment arose. She is the only minister who has an “open wallet” to “ensure containment.” [apoyo] the fallen,” said Milei during the election campaign.
Between worry and hope
Milei warned during the campaign that if he came to power he would make a sharp adjustment, and on Sunday he reminded his supporters who listened in silence to his inaugural speech. That day he laid down the story on which he justified his decisions: Argentina is heading for an inflationary “catastrophe” and “there is no alternative solution to adjustment and shock.” That is why many are warned.
“We hope that a clear idea of where we are going will be consolidated, because so far we have not gone anywhere,” Fernando, a 53-year-old merchant, said after the announcements. “It will be difficult, it will not be pleasant, but we are happy even if we have to try hard,” he said. Others were more concerned. Like Luis, a 70-year-old pensioner, who explained that saving at home starts with food. The pension he receives is around 130,000 pesos – half the value of a basic basket (about $150) – and he doesn't know how much he will receive this month. Or Silvia, a 37-year-old employee who is worried about the “catastrophic” increase in the cost of living because her salary “doesn’t fit it.” He believes one of the biggest impacts will be seen in public transport prices when government subsidies are removed from January, as the government expects.
A man holds a copy of a newspaper with Milei on the cover on December 11th. Luis ROBAYO (AFP)
Economists interviewed by EL PAÍS agree that the situation is critical. However, they warn about the impact that the government's measures will have on the population. “This is a classic adjustment that only leads to lower salaries and does not stabilize,” criticizes Florencia Medici, researcher at the National Council for Scientific and Technical Research (Conicet). Leandro Mora Alfonsín, economist and professor at the University of Buenos Aires, also points out the “complete lack of calibration of income policy”: “The prospects for the real economy are poor and we are in bad shape for the ordering of macroeconomic variables.” . Ask.”
Trade unions and social movements also warned that the course taken would ruin Argentines. The General Union of Workers (CGT), Argentina's largest union, met urgently and released a statement warning that “the adjustment will be paid for by the people,” adding that “it will not stand idly by.” The left-wing picketing organizations called for a strike and a “big” rally in the Plaza de Mayo on December 20th.
“Make it clear to them that there will be consequences if they take to the streets,” was the government’s response. The new Security Minister Patricia Bullrich announced a tough plan against the protests and became another protagonist of the week after Caputo. The new protocol against demonstrations calls on the four security forces dependent on the security ministry – the federal police, the gendarmerie, the naval prefecture and the airport security police – to disperse demonstrations that block roads and paths. “You will apply necessary and sufficient force, graduated in proportion to resistance,” Bullrich warned.
Javier Milei and Security Minister Patricia Bullrich during a campaign event. MATIAS BAGLIETTO (Portal)
To this end, the new minister abolished rules on police operations promoted under Cristina Kirchner's government to limit repression following the deaths of two people during a police operation in 2010. “Now there is more than just a restriction on police use “permission to use violence against demonstrators,” criticized the Center for Legal and Social Studies (CELS). The reaction also came from social movements and some parts of the opposition. Left-wing representative Myriam Bregman, who said the decision was “absolutely unconstitutional,” was attacked for her position. “Jail or bullet,” Liberal MP José Luis Espert, Milei’s former ally, threatened her on social media.
Meanwhile, parts of the new government's plans remained known, such as the imminent publication of a decree on the necessity and urgency of deregulation of the economy; the reduction of the state car fleet; the sale of two aircraft from the state oil company YPF; the intent to launder money; the renewal of ambassadors… The ruling party also managed to appoint the provisional president of the Senate in Victoria Villarruel's first session as President of the Upper House, contrary to Peronism's intention.
Presidential spokesman Manuel Adorni emphasized in the morning press conferences that he had noted to the media that this week's measures were only “the background” for others that would be announced “in the coming weeks,” and that will “be real”. deep.” Mieli continued without speaking publicly, although he attended all cabinet meetings, says the latest government statement, which highlights three points: that Milei reiterated his support for Caputo's Decalogue, that he supported Bullrich's anti-demonstration protocol supported and that he would do so this Friday raffle off his last salary as deputy.
Buenos Aires, Friday, December 15, at noon. The president records a live video on Instagram from his office. There are his sister Karina Milei, now general secretary of the presidential office, a notary and a retinue of young people with their phones raised. More than 115,000 viewers watched it live. Milei shows the handle of the presidential staff with the faces of his dogs; He realizes that he is working at this table and not that one; He says that the woman in the background is his best friend. He also signs the protocol of the draw of his last salary as deputy of La Libertad Avanza, an initiative launched two years ago to pay his salary as a civil servant. “Now I have another job,” warns Milei. The right-wing extremists have been sitting in the presidential chair for a week.
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