President Javier Milei told the nation Saturday night that more “chainsaw” cuts to public spending are on the way, declaring that his government's austerity programme would "last for years."
In his annual state-of-the-nation address before Congress, Milei gave a party political speech that was met with applause from allies and jeers from opponents.
Declaring his government to be “the best team of the last 50 years,” the La Libertad Avanza leader confidently predicted that good times are ahead.
Attacking his rivals and boasting of his economic achievements, the right-wing leader said further public spending cuts are on the way and trailed a fresh agreement with the International Monetary Fund.
"The chainsaw today is the symbol of a change of era, the beginning of a new golden age for humanity,” declared the President.
“We are the best government in Argentina’s history," said the head of state to roars from supporters on congressional balconies.
However, Milei’s speech was soon overshadowed by events in the immediate aftermath of the address.
As lawmakers filed out of the legislative chamber, the President’s top communications advisor, Santiago Caputo, appeared to threaten lawmaker Facundo Manes, after the duo had verbally clashed minutes earlier.
Milei, who ordered his speech opening congressional sessions be aired in a nationwide broadcast, had earlier reasserted his government’s path after his most testing spell in office to date.
The La Libertad Avanza leader, whose journey to Congress was accompanied by the sound ‘cacerolazo’ pot-banging protests from critics, has been heavily criticised for his role in a recent cryptocurrency scandal and bid to impose two Supreme Court justices by decree.
In protest at those moves, tens of opposition deputies skipped the speech in protest, leaving several benches in the Legislative Assembly absent. Only six of Argentina’s top 24 regional leaders (23 provinces and the autonomous capital of Buenos Aires City) were in attendance.
Milei, in response, went on the attack. In a speech littered with economic data and attacks at the opposition and the political “caste,” te boldly claimed to have fulfilled "97 percent of campaign promises in just one year."
He also confirmed that Argentina is close to a new funding agreement with the IMF, stating he would ask Congress to support a new deal “in the next few days.”
In another key takeaway, the right-wing leader restated his desire to secure a free-trade agreement with the United States, warning he may take Argentina out of the South America Mercosur trade bloc, which it co-founded, if its rules blocked that goal.
The only thing Mercosur had achieved, he declared, is to “enrich big Brazilian industrialists at the expense of impoverishing Argentines.”
‘Chainsaw’ vow
During the first half of his speech, Milei reviewed the inheritance he received upon taking office in December 2023 and boasted that his economic programme is “the most successful” in Argentina’s history.
Since entering politics, La Libertad Avanza leader has held up a chainsaw at events as a symbol of his push to restore fiscal discipline and slash bureaucracy in Argentina
Milei's measures, which have plunged Argentina into recession, tipped millions more people into poverty in the first half of 2024, bringing tens of thousands of people onto the streets in protest.
But the President has swatted away criticism, insisting that what he presents as short-term pain will lead to long-term gains for the economy.
"The chainsaw today is the symbol of a change of era, the beginning of a new golden age for humanity, but this time, instead of going against the world, Argentina is at the forefront," he said Saturday in his annual state-of-the-nation address marking the opening of ordinary Congress sessions.
"The eyes of the world are now on Argentina," Milei said, adding that in some cases other countries were taking note of his administration's approach to “apply it in their own countries.”
He cited tech billionaire Elon Musk, who has been tasked by US President Donald Trump with overseeing a new department to slash federal government spending and downsize or dismantle federal agencies – moves that in some cases have already been challenged in court.
Milei gifted his "dear friend" Musk a chainsaw that the SpaceX and Tesla CEO paraded on stage last month before a cheering crowd at the Conservative Political Action Conference (CPAC) near Washington.
The President said in his speech that "the chainsaw is not only a government programme, it is a state policy that will last for years," telling lawmakers he planned to pursue more budget cuts during his second year in office.
He celebrated that some 40,000 public employees had been laid off, the elimination of the film institute (INCAA), the Women's Ministry, the Institute against Discrimination and the state news agency Télam, which he described as ‘militant boxes’.
Milei has suspended public works, laid off tens of thousands of civil servants, gutted state agencies and reduced funding to provincial governments as part of his bid to shrink the government and revive Argentina's long-ailing economy.
He celebrated in particular the closure of the Women, Gender & Diversity Ministry, INCAA state film institute, INADI anti-discrimination watchdog and Télam state news agency, describing them as “militant.”
Describing them as a “scam of politics,” Milei said he had “eradicated the lie that public works generate jobs,” stating only that they “generate taxes.”
The La Libertad Avanza leader – who spoke from behind a lectern, standing on a carpeted box – touted his government's successes, recalling the significantly reduced inflation rate.
Consumer prices hikes have slowed from 25.5 percent in his first month in office to 2.2 percent in January.
New IMF deal
Milei then called on lawmakers to support a new agreement between the government and the International Monetary Fund, which would likely include a disbursement allowing the country to "eliminate" currency exchange controls this year.
The agreement “seeks to restore the Central Bank’s assets and thus its equity, so that inflation is only a bad memory of the past,” said Milei.
Debt repayments to the IMF would come "from a greater fiscal adjustment via a reduction in public spending," he said.
The IMF's 30-month loan agreement with Argentina expired on December 31 last year and is worth around US$44 billion – the largest programme it has.
The multilateral lender said that month it was in talks with Argentina on a new programme to replace that loan agreement.
Milei has said Argentina needs more funds in order to lift the so-called ‘cepo,’ the domestic word used to describe the nation’s complex system that limits access to foreign currency.
“This new agreement will provide us with the tools to pave the way towards a freer and more efficient exchange rate regime for all our citizens and to be able to attract greater investment that will translate into lower inflation, higher growth and employment, with the consequences... better salaries which means fewer poor and indigent people,” he stated.
On the domestic front, the President promised changes to labour rules, “profound immigration reform” and a “structural tax reform” that would simplifying the tax regime and leave Argentines with “only six taxes.”
The announcement regarding labour reform came on the same day the ATE state workers' union denounced a fresh wave of almost 3,000 layoffs across the public sector.
Prior to the speech, members from the main opposition Peronist force released a communiqué highlighting why they had chosen to stay away.
Among other reasons, they cited Milei’s role in the “crypto-scam” and the attempt to appoint Supreme Court justices by decree.
Milei briefly responded to the so-called ‘cryptogate’ scandal that began on February 14, when the President promoted on social media – according to him, "in good faith” – a cryptocurrency that in hours collapsed, causing multi-million dollar losses for most of those holding it.
The case has made international headlines, with business magazine Forbes this week describing it as “the biggest crypto theft in history.”
Court cases have been filed in Argentine and US courts as blockchain experts online trace the movement of the money involved in the scandal.
Milei indirectly referred to the issue in his speech, declaring: “The Central Bank stole US$110 billion from Argentines. Talk about a pyramid scheme!”
Providing enough support to ensure cheers in the legislative chamber, the government imposed limits on journalists and photographers covering the event and available space was filled with invited loyalists.
Milei regularly targeted his opponents, in particular Buenos Aires Province Governor Axel Kicillof, who the President said should resign because of insecurity in the nation’s most populous region.
Referring to recent violent deaths, the President reiterated his government’s desire to lower the age of criminal responsibility and stiffen “all” sentences for violent offenders in Argentina’s Penal Code.
He stressed that "the problem is not limited to ordinary crime – drug-trafficking and terrorism represent a clear and present danger for Argentines."
Aiming at the governor directly, Milei declared: “If Kicillof wants to solve the problem, he has two alternatives: abandon this abolitionist vision and punish criminals; or get out of the way and let us solve the problem.”
The President said his government is "working on a national security law that will provide the Argentine state, our intelligence service and our forces with the tools to pursue those who want to threaten the lives of Argentines.”
Not all of Milei’s complaints, however, seem limited to the opposition.
Vice-President Victoria Villarruel, who wanted to welcome the head of state on the esplanade of Congress and has reportedly not spoken to Milei for months, was carefully and deliberately cut out of the official broadcast footage, which was centrally controlled by the government.
Despite those efforts to ignore her, the cracks remained evident. Villarruel, by accident, almost ended Milei’s speech early, which led to an uncomfortable unscripted exchange.
"I didn't finish, I mean, don't rush me," Milei reproached, forcing the Senate chief to ask for "forgiveness" amid nervous laughter.
– TIMES/AFP/NA
