When Labour’s Liam Byrne left a note for the incoming coalition Treasury team in 2010 which said ‘I’m afraid there is no money’, it was meant as a joke. When Argentine president Javier Milei sent a similar message in his inauguration speech on Sunday, it was far from comedy. It was an honest assessment of the seriousness of the situation faced by South America’s second-largest economy.
Milei won last month’s election thanks to an anti-establishment campaign in which he heavily criticised the country’s political classes and promised drastic change. It was his penchant for cloning dogs and bringing a chainsaw to campaign rallies that earned him international headlines, but it was something far simpler that appears to have led 56 per cent of Argentines to choose him as their next president: the economy.
Even in a country used to living with economic crises, the situation today is bleak. Argentina has a little over three months to make a $10.6 billion (£8.4 billion) payment to service its gargantuan debt to the International Monetary Fund, the total of which stands at $45 billion (£35.8 billion). This will be a tough ask while it runs a trade deficit in the tens of billions and is experiencing triple-digit inflation.
Milei’s flagship pledge – to close the central bank and dollarise the economy – will also be difficult to achieve due to the country’s reserves of dollars being effectively empty. His decision to appoint the relatively moderate Luis Caputo as economy minister suggests this plan is on ice for now. All of this added up to an inauguration speech far more grounded in realism than the fiery rhetoric that characterised his campaign as he warned of the need for ‘shock treatment; to kickstart the economy.’
‘We don’t have alternatives and we don’t have time’, he said, as he warned that the actions of previous governments had left the country on the brink of its ‘biggest crisis in history’.