“Close and trust-based relations” (I)
The German government wants to cooperate “closely and in a spirit of trust” with Argentina under its ultra-right-wing president Javier Milei. He seeks to govern without parliamentary approval and impose a shock therapy of radical deregulation.
BUENOS AIRES/BERLIN (own report) – As the German government continues its push to have the Mercosur Free Trade Agreement ratified, it is making overtures to Argentina even under its new far-right president, Javier Milei. The desire for “close and trust-based cooperation” was underscored by a government spokesperson in Berlin. Milei, who is about to radically overhaul his country’s foreign policy, has already put Argentina’s planned accession to the BRICS alliance on hold. He is distancing himself from China and seeking stronger alignment to the United States. This will also present opportunities for closer cooperation with Germany and the EU. Domestically, Milei has introduced a radical programme of economic deregulation, which entails a far-reaching sell-off of state-owned property and the imposition by decree of severe restrictions on the right to strike and demonstrate. He wants the National Congress of Argentina to grant him the power to govern for two years by decree, circumventing the need for parliamentary approval. For critics, his authoritarianism brings back memories of the dark years of military dictatorship. While Berlin is keen to cooperate more closely, Argentina is witnessing the first mass protests.
“Conclude negotiations quickly”
The German government is continuing its efforts to get the free trade agreement with the South American trade bloc Mercosur ratified as soon as possible. Last week, Chancellor Olaf Scholz telephoned with Argentina’s new President Javier Milei to discuss further steps. In Berlin, a government statement noted that both parties “agreed that the negotiations on the agreement should be swiftly concluded”.[1] During his election campaign, Milei had put forward the demand that Argentina should leave Mercosur. Such a move would render the agreement with Europe untenable. Now, however, there is no longer any talk of this option. The German government is still working to override French resistance to the agreement. France – like Austria and Ireland – fears that the deal will lead to major disadvantages for its own farmers. Paris has been blocking progress on the agreement for years by digging in on the question climate progress: France and others demand that Mercosur sign an additional declaration on protection of the rainforest – a linkage that is rejected by the Mercosur states. A German government spokesperson explained last week that Berlin had been repeatedly urging acceptance of the agreement “in close talks with the French side” and hopes to “arrive at a solution”.[2]
“Continue to cooperate closely”
It is not only with regard to the EU-Mercosur agreement that Berlin and the EU currently envisage useful opportunities to expand their cooperation with Argentina. President Milei is in the process of radically reshaping his country’s foreign policy. He cancelled Argentina’s membership of the BRICS alliance on 1 January 2024, reversing the fruit of negotiations by the previous government. Instead, the new president prioritises cooperation with the United States. Indeed, he visited Washington at the end of November, even before being sworn in, and reached some initial understandings with the US administration. Milei has also declared his intention to cooperate closely with Israel. Meanwhile, relations with China have become extremely fraught. However, China is Argentina’s second-largest trading partner and currently its most important investor, so it will hardly be easy to make a clean break with the Chinese, despite Milei’s pledge made during the election campaign. His Foreign Minister, Diana Mondino, recently hosted an official reception for the Taiwanese representative in Buenos Aires, causing considerable offense in Beijing.[3] As for Argentina’s cooperation with Germany, Milei is keen to strengthen economic ties, as he reportedly explained during his telephone call with Scholz.[4] In Berlin, a government spokesperson already confirmed at the end of December Germany’s a desire to “continue the close and trust-based cooperation with Argentina”.[5]
The anarcho-capitalist
From the point of view of the German government, the extreme right-wing stance taken by Milei and leading members of his cabinet apparently presents no obstacle to collaboration. Milei himself is an avowed disciple of the Austrian School of economic theory, whose most prominent representatives were Ludwig von Mises and Friedrich August von Hayek. Adopting libertarian positions, Milei describes himself as an “anarcho-capitalist”. During the election campaign he declared that he would abolish the Argentinian national currency, the peso, replacing it with the US dollar, and close down the central bank. Asked about trafficking in human organs, he once described it as “just another market”.[6] Internationally, Milei maintains good relations with advisors to former US President Donald Trump. He has highlighted the fact that before his first meeting with US President Joe Biden at the end of November he had spoken personally with Biden’s predecessor, Donald Trump. Milei also maintains close relations with Brazil’s former president Jair Bolsonaro and his son Eduardo Bolsonaro, who handles international contacts on his father’s behalf. Indeed, Milei received valuable support from Bolsonaro’s right-wing circle during the election campaign.
Deregulation by emergency decree
Milei began to put his ultra-liberal plans into practice on a grand scale with the very first measures taken in office. On 20 December, he declared a state of emergency by presidential decree (Decreto de Necesidad e Urgencia) and imposed more than three hundred new measures. These include initiatives to undermine labour law, lift rent restrictions and push through privatisation of state-owned companies. Observers speak of “shock therapy”. On 27 December, the Ley Omnibus was then put before parliament. This sweeping legislative text, with 664 articles, contains numerous other deregulatory measures, including the scrapping of mining industry regulations, the opening of Argentina’s maritime zones to foreign fishing fleets, the legalisation of hiring domestic help without paying social security contributions, and the removal of controls and penalties for illicit employment.[7] It is estimated that the Argentinian public have already lost 15 per cent of their purchasing power in Milei’s first month in office. That is almost twice as much as during the entire tenure of Milei’s predecessor Alberto Fernández (8 per cent from December 2019).[8] The Ley Omnibus also includes steps to repress public protest. Not only will the right to strike be severely restricted but, in future, groups of just three people will have to obtain authorisation to gather in public.
General strike
The most startling development is that Milei, with whom the German government is seeking “close and trust-based cooperation”, is demanding that both chambers of the Argentinian parliament allow him to govern by decree for two years. And at the end of those two years Milei wants to be able to grant himself arbitrary powers for the remainder of his tenure. Article 29 of the Argentinian constitution expressly prohibits such an arrangement. Moreover, is highly unlikely that Congress would volunteer to disempower itself.[9] Irrespective of the legislative issues, the judiciary has already blocked Milei’s first measures. In particular, his labour law deregulation, including the shortening of maternity leave and extending of probationary work periods, have been halted in the courts.[10] Moreover, there has been a wave of massive protests on the streets. The first demonstrations took place on 20 December, just ten days after Milei took office. A general strike has been announced for 24 January. The fight against the emergency decrees is in full swing.
The shadow of the military dictatorship
Another cause of unrest is the fact that Milei has undertaken a comprehensive shakeup of the country’s military command structure, the consequences of which are still unclear. This move accompanies political efforts by Vice President Victoria Villarruel to rehabilitate Argentina’s military dictatorship. For critics, the messages coming from Casa Rosada in Buenos Aires awakens dark memories of the junta, and also of German collaboration with the dictatorship and the special German influence on the history of the extreme right in Argentina. German-Foreign-Policy.com will report again shortly.
[1] Bundeskanzler Scholz telefoniert mit dem Präsidenten der Argentinischen Republik Milei. bundesregierung.de 09.01.2024.
[2] Regierungspressekonferenz on 10 January 2024. bundesregierung.de 10.01.2024.
[3] Diana Mondino sigue provocando a China. pagina12.com.ar 10.01.2024.
[4] Román Lejtman: Milei dialogó con Scholz y Trudeau para fortalecer las relaciones bilaterales con Alemania y Canadá. infobae.com 09.01.2024.
[5] Christoph Röckerath: Was von Mileis Außenpolitik zu halten ist. zdf.de 05.01.2024.
[6] Karen Naundorf: Präsident mit Kettensäge. srf.ch 20.11.2023.
[7] Miguel Arndt: Nationalkongress in Argentinien soll Mileis “Ermächtigungsgesetz” absegnen. amerika21.de 31.12.2023.
[8] Roland Peters: Milei will Kongress für mindestens zwei Jahre entmachten. n-tv.de 09.01.2024.
[9] Miguel Arndt: Nationalkongress in Argentinien soll Mileis „Ermächtigungsgesetz” absegnen. amerika21.de 31.12.2023.
[10] Gericht bremst Milei in Argentinien aus. n-tv.de 04.01.2024.
