Milei’s ‘all-or-nothing’ attitude bogs down his plan to defund the state in Argentina

In less than a month, the new president of Argentina, Javier Milei, has pushed forward hundreds of measures that he believes are necessary to make up for a century “of decline.” In his ideology, Argentina can go back to being a “thriving” country if it applies his ultra-liberal prescription “with shock and without gradualism.” But the viability of Milei’s plan to scrap the state depends on whether Congress at the very least agrees to discuss a bill with more than 600 articles, which means legislators will have to address a package of hundreds of pages in extraordinary sessions. It also depends on whether a massive decree that repeals rules and makes hundreds of regulatory changes is rejected in parliament or stopped by the justice system, as is already happening in some courts that do not see the “need” or the “urgency” of certain measures. The lack of priorities in the government’s strategy could end up weakening the far-right leader.

Milei has opened many fronts all at once to defund the state and fundamentally change a good part of the political, social and economic structure of Argentina. The day he assumed power, on December 10, he made it his priority to reduce inflation that in November exceeded 160% year-on-year, and he warned that he would do so with a cut of $20 billion to the public sector. The measures that he announced as soon as he arrived at the Casa Rosada, however, address a much broader variety of issues. They propose everything from a reform of the political system to the “unlimited” resale of tickets to sporting events; they enable the privatization of state companies and limit the right to strike. And there are more on the way, he has announced.

Many of the reforms are included in the decree that Milei signed on December 20 and came into force eight days later. The labor reform included in there was recently suspended by two court rulings, but the rest are now in force for as long as Congress does not reject the decree or the justice system does not dictate new precautionary measures against it. The government anticipates that the process will be long. Milei’s other measures are included in the bill that he sent to Congress a week later and that has a different procedural route through parliament, like any other bill. But the package is so broad and extensive that no sector of the opposition has offered its full support because, among other reasons, it delegates extraordinary powers to the executive.

The government, however, is confident that its program “will move forward.” “The match doesn’t end until the final whistle,” Milei said after the first setback to his strategy in court. Although he also warned that “two thirds” of the results of his program will only be seen “in 15 years.” “Your children and grandchildren are going to live wonderfully well,” he explained to the journalist who was interviewing him on the radio.

“Milei is encountering one hurdle after another because his team does not have state management experience. The government may have good ideas, but if it cannot implement them, then they are simply in the realm of imagination,” says Gabriela Ippolito-O’Donnell, a doctor in Political Science from the University of Cambridge and professor at the University of San Martín. Ippolito-O’Donnell has observed “a lot of improvisation” in the government team: “Everything is getting bogged down because its people don’t know what to do. The market recipe is easy. But modern states are more complex than that,” she warns. This expert notes that the success or failure of the plan will depend on the pressure exerted by the “different affected groups” in Congress, in the courts or on the streets.

To the setback in the courts — Milei’s team said it will appeal — this week was added input by a group of governors of Patagonia, all from different parties, who feel that the proposed reforms on the regulations that govern fishing activity “seriously affect the national economy and the development” of that sector. This past Thursday, Interior Minister Guillermo Francos met with one of those governors and with the mayor of a coastal town, and the result was a government statement in which it promised to “clarify some points” of the law. Perhaps this way, point by point, the negotiation will advance.

Minister Francos, a traditional and moderate politician, represents the wing within Milei’s Cabinet that is most open to dialogue. In that sense, he clashes with Milei, who has stated that those who are not “in favor of freedom,” that is, in favor of him and his government, are on the side of the “impoverishing model.” “The dialogue is always open,” said the President’s Office spokesman Manuel Adorni on Friday when a journalist asked him if the meeting between the governors and Francos inaugurated “a new stage” to “accept more changes to the law.” Immediately after expressing the government’s willingness to negotiate, Adorni added: “Which does not take away from the fact that we are convinced about the law [...]. In that conviction we are not, in principle, willing to change it.”

Extraordinary sessions

This past Thursday, four committees were formed to begin debating the law in a climate that journalists have described as “tense.” One of the biggest controversies was sparked by the appointment of deputy José Luis Espert as president of the Budget committee. Espert is a legislator who has threatened left-wing lawmakers on social media with “jail or a bullet.” Members of Congress are dealing with a package of more than 300 pages that they must discuss throughout January in extraordinary sessions. The government, for now, has rejected extending that period.

“This hyperactivity is common at the beginning of a government’s term,” says Juan Negri, a doctor in Political Science and director of a program in Political Science at Di Tella University, who finds “rationality” in the government’s measures. “The question I have,” he continues, “is whether the government really plans to negotiate. If it goes all or nothing, the situation will be more complicated because the government did not secure legislative support, it came out talons first against many actors and there is a lot of social activity against it.”

“The worst-case scenario for the government is to find itself in April without any good news to give, unpopular, in the minority in Congress, and with social movements in the streets,” adds Negri.

Milei’s party, La Libertad Avanza (Freedom Advances), is in a minority in Parliament. Within the main opposition bloc, the leftist Peronists, there is still no clear leadership. Former economy minister Sergio Massa — who lost to Milei in the elections — former president Alberto Fernández and former vice president Cristina Kirchner are out of the picture for now. The center-right Together for Change is also defining its space. “It’s going to cost them. The electoral geometry is complicated for them because some are against the form [of Milei’s measures], but the majority is in favor of the substance,” explains Negri. Yet others have formed a new bloc, Hacemos Coalición Federal (We Make Federal Coalition), which also incorporates sectors of Peronism.

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