‘There is no alternative to austerity,’ declares Milei after swearing-in

Javier Milei was officially sworn in as Argentina's president on Sunday with a vow to deliver harsh spending cuts and sweeping economic reforms.

In a dramatic address from the steps of Congress, Milei said that a "new era" had begun in Argentina that would "bring an end to a long history of decadence and decline."

"The Argentines have overwhelmingly expressed a will for change that has no return. Today we are burying decades of failure and senseless disputes," he declared. 

He made his remarks just minutes after being sworn-in as head of state during a session of the Legislative Assembly. Vice-President Cristina Fernández de Kirchner, in her role as head of the Senate, oversaw proceedings. 

President Alberto Fernández also appeared to hand over the presidential insignia to his successor.

Following his inauguration, Milei took to the steps of Congress, where he delivered his first national address.

 

First speech

The new president's speech mixed a doom-laden assessment of the state of play with claims that freedom and liberty would lead Argentina to prosperity. Milei said he was sure that his path is the only way forward.

"At the beginning of the 20th century we were the beacon of light of the West. We received millions of immigrants escaping from a devastated Europe. But then the impoverishing ideas of collectivism were embraced and for more than 100 years politicians have insisted on defending a model of poverty, stagnation and misery," said Milei.

However, "that model has failed," he declared, calling his election "a turning point in our history."

Milei sought to highlight Argentina's economic decline. Inflation has hit almost 140 percent year-on-year and today, 40 percent of the population lives in poverty.

"KMuch has been said about the inheritance we are going to receive. Let me be very clear: no government has received a worse inheritance than the one we are receiving" he analysed.

Highlighting that strict austerity measures were imminent, Milei said that the "solution" to economic decline "implies a fiscal adjustment in the national public sector of 5 points of GDP that will fall entirely on the state and not on the public sector."

Warming to his theme, he warned that Argentina would face an annual inflation rate of "15,000 percent" unless it took action.

"The outgoing government has left us with hyperinflation," Milei said. "There is no alternative solution to adjustment."

"All the shock programmes, except the one in 1959, were successful," he said confidently. "Gradualism requires financing."

"There is no money," he declared to applause and chanting from supporters.

"The only way to escape poverty is more freedom," Milei told the nation.

"We know that all is not lost. It will not be easy. One-hundred years of failure cannot be undone in a day, but one day we begin, and today is that day," the president declared to applause.

 

'Loyalty and patriotism'

The 53-year-old libertarian economist has vowed there will be no "half-measures" as he tackles decades of overspending, debt and convoluted currency controls in Latin America's third-biggest economy.

"I swear to God and country... to carry out with loyalty and patriotism the position of president of the Argentine nation," he said as he took the oath of office.

Thousands of supporters lined the streets outside Congress, waving the country's blue-and-white flag and chanting Milei's rallying cry of "freedom!"

"Perhaps it will take us many years to rebuild the country but maybe this is the beginning of a new era for us," said Javier Lobos, 41, a shopkeeper.

"We will be able to work and strive to fulfill our dreams without the burden of suffocating taxes, inflation and the strain of a currency system that is crippling our nation."

 

World leaders

The event brought together a diverse handful of world leaders, including Ukraine's President Volodymyr Zelenskyy and Hungary's nationalist Prime Minister Viktor Orban – the only EU leader who has maintained close ties to Russia.

"The right is rising not only in Europe but all around the world," Orban wrote on social media, sharing a picture of a meeting with his "good friend," Brazil's far-right ex-president Jair Bolsonaro, who is also in town for the ceremony.

Chile's leftist leader Gabriel Boric and the King of Spain Felipe VI were also in attendance.

After taking the oath of office, Milei will give his first speech as president from the steps of Congress. He will later swear in a Cabinet of nine ministers -- a major slimdown from the current 18.

He has said his first set of measures will be presented to Congress in a matter of days.

 

Meteoric rise

Milei's inauguration caps a meteoric rise for the former television panelist who entered politics only two years ago.

His rants against the "thieving" establishment fired up voters and drew comparisons to leaders like Bolsonaro and former US president Donald Trump.

With his deliberately dishevelled mop of hair and rock star persona, he would wave a powered-up chainsaw at political rallies, vowing to slash public spending and a bloated cabinet.

He vowed to "dynamite" the Central Bank and replace the ailing peso with the US dollar.

 

'Lights all flashing red'

"Like many of his predecessors, Milei will take office with the warning lights all flashing red," said Benjamin Gedan, director of the Argentina Project at the Washington-based Wilson Center.

But for Argentines, the future is mired in uncertainty over what exactly their new president plans to do.

With few lawmakers from his party in Congress the hard reality of politics has set in, and Milei has softened many of his stances and allied with politicians he previously insulted, incorporating some into his Cabinet.

Talk of shutting the Central Bank, dollarisation and welfare cuts has dissipated.

"Milei 2.0 will still face an uphill climb, but he appears to have adopted a more pragmatic agenda and sought the advice of more experienced political figures," said Gedan.

However, with Central Bank reserves in the red and no credit line Milei is facing "bare cupboards," added the analyst.

"His rescue strategy, including a rapid downsizing of the government, will be tough to swallow for a long-suffering population. Either way, the next few months will almost certainly see social and political turmoil."

 

'Stagflation'

Among the questions hanging over Argentines' heads in the coming days will be whether Milei will devaluate the strictly controlled peso and loosen the currency controls which have birthed a multitude of dollar exchanges.

Economist Victor Beker of the University of Belgrano said the first "litmus test" for Milei will be if he actually halts the money printing by the Central Bank that he has so derided, which funds much of the government's spending.

Milei has warned that it could take between 18 and 24 months to bring the country's inflation under control, warning of months of "stagflation" -- rising prices coupled with economic stagnation.

For 2023, the International Monetary Fund (IMF) has projected a contraction of 2.5 percent in Argentine GDP.

 

– TIMES/AFP/PERFIL