#GPS | La primera CRISIS de la era MILEI

Summary

This week's political discourse centers around Argentine President Javier Milei's challenging journey, marked by setbacks and strategic retreats. Amidst mounting pressures and diminishing support, Milei's ambitious fiscal package faced opposition, leading to a significant withdrawal of proposals under the guidance of Minister Caputo. Milei's steadfast stance on non-negotiation and his surprise at the rapid achievement of economic indicators, despite the adversity, highlights a tumultuous period. The narrative also delves into the unrealistic expectations of bypassing parliamentary negotiation, culminating in a paradox where the intended reduction of state imposition on citizens begins with increased taxes, alienating key voter demographics. This account portrays a vivid picture of political maneuvering, public discontent, and the complexities of implementing a liberal economic agenda in Argentina.

Takeaways

• 💬 President Milei's week is characterized by struggles and a seeming impasse in advancing his agenda, highlighting challenges in pushing through his fiscal package.
• 🔔 In a Wall Street Journal interview, Milei expresses surprise at the rapid achievement of results in controlling inflation, despite a lack of clarity on the interview's timing.
• 💥 The government faced a setback in passing the Omnibus law, a key legislative piece for Argentina's reconstruction based on freedom principles, due to insufficient support.
• 🤔 Milei's insistence on not negotiating and taking a firm stance against governors and opposition parties is noted, despite the lack of political support from governors and local officials.
• 📝 The fiscal package withdrawal from discussion indicates a shift in strategy, focusing on achieving a zero deficit goal without specific fiscal measures initially proposed.
• 💁‍♂️ Questions are raised about the government's expectations for support from non-party governors and officials, highlighting a miscalculation in political strategy.
• 🚨 Milei's approach, seen as almost messianic, underestimates the political complexity and opposition's interests, leading to a significant recalibration of his legislative strategy.
• 👍 Opposition from sectors that potentially supported Milei, like agricultural and industrial sectors, against tax increases signifies a disconnect between Milei's policies and his voter base.
• 💡 The irony of a government aiming to reduce taxes yet proposing tax hikes as its first major action underscores a contradiction in Milei's economic approach.
• 📈 Public discontent is anticipated among middle-class individuals facing increased taxes amidst inflation, challenging Milei's promises of tax reduction and economic improvement.

Q & A

What was President Milei's controversial fiscal package that he wanted to push through?

President Milei wanted to pass an 'omnibus' fiscal package law quickly that included tax hikes and spending cuts to achieve a zero deficit. It included higher export taxes and bringing more people into the income tax base.

Why did Milei's fiscal plan run into trouble in Congress?

Milei did not have support from opposition governors and legislators who would be negatively impacted. He mistakenly thought his electoral win gave him a mandate to force through his agenda without negotiation.

What concessions did Milei's government have to make regarding the fiscal plan?

They had to withdraw the entire fiscal package from the omnibus law. The economic minister Caputo said they would remove the fiscal package and figure out another way to reach the zero deficit goal.

How did Milei justify and sell his tough fiscal policies to the public?

He claimed the policies, while painful in the short term, were necessary to liberate the economy from excessive taxation and government interference. He asked the public for broad power and support for his economic 'experiment'.

Why was it surprising that Milei focused on tax increases given his libertarian views?

Milei campaigned on lowering taxes but his first proposals were tax increases on exports, industry and higher-income earners. This contradicted his anti-taxation ideology.

What criticism does the narrator make regarding Milei's leadership approach?

The narrator says Milei took a arrogant, over-confident approach by insulting legislators and thinking his electoral win would intimidate them into passing his agenda without negotiation.

How did the omnibus law situation show Milei's government was struggling early on?

After only a month, the administration's two big policy moves (the omnibus law and a presidential decree) were stalled, showing Milei's team was ineffective at executing their strategy.

Why was Milei's assumption that he could force through his fiscal plan unrealistic?

As a minority president without support from any governors, he lacked the political coalition needed to pass major reforms without compromises.

Who reportedly convinced Milei to withdraw the fiscal package from the omnibus law?

Some reports indicated his sister Karina Milei helped persuade him on Friday to back down when it became clear he lacked the votes in Congress.

What might the omnibus law situation mean for Milei's ability to govern going forward?

It showed he will likely have to moderate his proposals and negotiate more pragmatically to build legislative coalitions, rather than govern unilaterally by decree.