What has Milei done and why some support him?
Fiscal austerity and drastic cuts
Reduction of ministries and public spending.
Financial surplus since January 2024.
Inflation control
From levels of 25% monthly to 2.7%.
Stabilization of the Argentine peso and increase in dollar reserves.
Deregulation and economic liberalization
Increase in foreign investment in strategic sectors such as energy and raw materials.
Relaxation of rental laws, which stabilized property prices.
Boosting confidence in international markets
Country risk reduction from 2,000 points to 750 in less than a year.
Support from institutions such as JP Morgan, The Economist and Commerzbank.
Result:
Milei's defenders point to his pragmatic approach, based on free market principles, as necessary "shock therapy" for an economy in crisis.
What has not been done and the criticism received
Lack of complementary social policies
The cuts have affected vulnerable sectors without clear mitigation measures.
Persistent economic recession
Although macroeconomic indicators have improved, GDP is still not showing sustained growth.
Conflictual foreign relations
Tensions with key trading partners such as Brazil, affecting regional stability.
Dollarization as a double-edged sword
Eliminating the Argentine peso poses risks, such as the loss of monetary autonomy and exposure to fluctuations in the dollar.
Result:
Critics argue that Milei's economic policy benefits financial markets and large investors, while increasing social inequality and leaving the domestic economy in a fragile state.
Impact on cryptocurrencies and the global economy
Cryptocurrencies in Argentina
Milei's approach favors cryptocurrency adoption by deregulating markets and fostering economic freedom.
Argentina could consolidate itself as a hub for crypto investments due to its favorable framework.
Global repercussions
Foreign investors: Greater confidence in Argentina as a financial destination may attract international capital, shifting funds from other emerging markets.
Global economy: Milei's policies influence the narrative of austerity and liberalisation, facing models such as the German one, which is more interventionist.
Comparison with Bitcoin
Milei is perceived as a disruptive figure, similar to how Bitcoin challenged the traditional financial system. Both share a philosophy of decentralization and questioning the status quo.
Lesson for Germany or global warning?
The Argentine case has sparked reflection in economies such as Germany, where some analysts suggest adopting aspects of the Milei model to combat economic stagnation. However, the inherent risks of an extreme approach are a warning to the world: quick fixes can offer immediate results, but also generate long-lasting imbalances.