Argentina, the Milei era begins, promising shock reforms: "For us it will be a turning point, like the fall of the Berlin Wall"

It was an inauguration full of tensions and symbols, that of the new Argentine president Javier Milei, the anarcho-capitalist who promised to bring his country out of a decade-long crisis, through drastic recipes that convinced the majority of voters. Before and during the ceremony his supporters crowded the streets of Buenos Aires insulting their opponent Sergio massa, defeated center-left candidate, and the former president Cristina Kirchner, who responded by making rude gestures towards the crowd, all while the former Brazilian president Jair Bolsonaro, Milei's friend, was welcomed triumphantly. In the end he didn't show up Donald Trump, who had initially announced his participation, shouting "Make Argentina great again". Not even the current Brazilian president Lula went to the inauguration, immediately strongly disagreeing with Milei's intentions to break with Mercosur, and replaced without too many worries by inviting the more welcome Bolsonaro, while as a sign of peace he still wanted there is another leader of South American socialism, the president of Chile Gabriel boric. 

For the rest, it was a parade of right-wing leaders: from the new presidents of Ecuador and Paraguay, Daniel Noboa e santiago pena (the latter becomes rotating president of Mercosur, the South American commercial alliance, from January), up to the Hungarian president Viktor Orban, while the Italian Prime Minister Giorgia Meloni limited herself to a message of good luck in her work. The presence of the Ukrainian president was also highly symbolic Vladimir Zelensky, on several occasions immortalized while speaking closely with Latin American leaders, pleading the case for war against the Russian invasion.  

Moving on to the contents, Milei made, as expected, a speech of clear break with the past, announcing "a new era", which however will not be free from traumas. Indeed, the new tenant of the Casa Rosada immediately put his hands forward: we will emerge from the crisis, but this involves a shock, a shock therapy. “Today a new era begins: we can declare the end of a long and sad history of decadence and begin the journey of rebuilding our country,” he said on a sunny morning in the Argentine capital. “At the beginning of the twentieth century we were a beacon for the Western world, then we embraced collectivism and its ideas that impoverished us. For over a century we have insisted on pursuing an economic model that has generated poverty, stagnation and misery. Just as the Berlin Wall marked the end of an era in the world, these elections mark a breaking point in Argentina's history." 

Then, Milei explained that no government has inherited such a disastrous situation, with poverty at 40%, inflation estimated in November at over 160% on an annual basis, state coffers practically empty and the exchange rate with the dollar increasingly inaccessible . Despite this, the president once again promised to launch the attack: “There is no alternative to shock, to shock therapy, because there is no money and gradualist policies have not worked. We will make tough decisions, but the effort will pay off. We will avoid the decadent spiral of Maduro's Venezuela: the only way out of poverty is with more freedom", harangued the 53-year-old economist, implying that he will insist on ultra-liberal policies and cuts in public spending, through rapid privatizations and suppression of some ministries. 

However, hovering over him, always vigilant in keeping him within the ranks, is the figure of the leader of the moderate right Mauricio Macri, president from 2015 to 2019. The votes of the liberals were decisive for Milei's victory and it is no coincidence that Macri was the first former president to be greeted and thanked during the inauguration ceremony. Not only that: although Milei had promised the "scrapping” of the caste, they will enter the new government several members of Macri's party, starting with the candidate in the last elections, Patricia Bullrich, who will most likely be Minister of Security. This "Cencelli manual" situation, which will even include opposition members (the Argentine ambassador to Brazil Daniel Scioli, former deputy of the Peronist president Nestor Kirchner, will be confirmed), according to experts will prevent Milei from having his hands too free and to persist, for example, with the clumsy project of totaldollarization of the Argentine economy. 

Meanwhile, the market reaction to his election has so far been lukewarm, or at least less traumatic than one might have expected. In the aftermath of the ballot at the end of November, theMerval index of Buenos Aires had immediately lost 20%, only to recover in the following weeks and exceed the high of the year in the last session before taking office. Inflation, which in October had decelerated to 8% on a monthly basis and to 142% on an annual basis, started to rise again in November: Bloomberg's forecast is a further +11% on a monthly basis, which would bring the twelve-month jump over 160%. The rise of the dollar has not stopped, but nor has it exploded, which can now be purchased on the official market with over 360 pesos, but which on the parallel, the so-called blue dollar, has moved closer to the 1.000 mark, after having retreated slightly in the aftermath of the Milei's election.