© Reuters. FILE PHOTO: Argentina’s President Javier Milei looks on as he meets with U.S. Secretary of State Antony Blinken (not pictured) at the Casa Rosada Presidential Palace, in Buenos Aires, Argentina February 23, 2024. REUTERS/Agustin Marcarian/Pool/File Photo
By Walter Bianchi
BUENOS AIRES (Reuters) – All eyes were on Argentina’s combative libertarian President Javier Milei on Friday ahead of a prime time state-of-the-union style speech set for the evening opening of Congress, even as protests started to build on the streets and markets rallied.
The outsider economist and former TV pundit, who wants to shake up Argentina’s embattled economy with “chainsaw” cost cutting, privatizations and market-led policies, is winning over markets but facing push back from workers and lawmakers.
His evening speech will be closely watched, after Congress rebuffed his signature reform bill last month and could take their knives to his sprawling decree rolled out when he took office in December as regular legislative sessions begin.
Milei could moderate and reach across the aisle – he needs to with only a small share of the legislature – or come out fighting after he slammed lawmakers and governors as “traitors” for opposing his bill and said Congress was a “nest of rats”.
“People are waiting to see the content and tone of the president’s words,” local finance firm SBS Group said in a report.
“The event is taking place in the context of recent tensions, both with the provinces and with other political actors after the fall of the ‘omnibus law’ a few weeks ago, as well as distorted prices hammering people’s purchasing power.”
Inflation over 250%, which predates Milei but rose after he devalued the peso currency sharply in December, has pushed up poverty levels seen nearing 60%, raising tensions among workers and unions, and prompting more strikes and protests.
Further protests are expected around the capital on Friday afternoon against subsidy cuts and outside Congress.
Some powerful regions have also hit back at Milei over planned funding cuts, including oil- and gas-rich Chubut province and the populous Buenos Aires province. La Rioja province has also warned it will miss bond payments due to the economic situation, a thorn in Milei’s side as he tries to win over long-suffering investors.
Markets, meanwhile, edged up on Friday, with the black market peso dropping near 1,000 per dollar, further narrowing the gap with the controlled official rate at 843 pesos.
Sovereign bonds, that have been on a bit of rally in the last month as investors have cheered Milei’s austerity measures and fiscal tightening, edged up some 0.2% on average, while the S&P Merval equities index was up 2.3%.
(This story has been refiled to fix a typo in paragraph 1)
