Javier Milei’s Shock Therapy Would Be a Disaster for Working-Class Argentinians

Argentina’s new president, Javier Milei, has issued a decree with over 350 reforms tearing up labor rights and privatizing industries. The “shock therapy” plan marks a dangerous expansion of the president’s powers — but it also faces fierce opposition.

President of Argentina Javier Milei gestures during his inauguration ceremony on December 10, 2023 in Buenos Aires, Argentina. (Tomas Cuesta / Getty Images)

Javier Milei became Argentina’s president this month promising “shock therapy” to curb inflation and resolve the country’s foreign debt and currency reserve woes. Last Wednesday, the Argentine public got its first taste of what that therapy will look like. Declaring a state of economic emergency, the Milei administration issued a Decree of Necessity and Urgency (DNU) containing over 350 measures. Unless struck down by Congress, the plans will deregulate broad swathes of the economy, erode labor rights, and pave the way for mass privatization of state-owned enterprises like airline Aerolíneas Argentina and gas and oil company YPF.

The depth and breadth of deregulation has sent a shockwave through Argentina, as has Milei’s unprecedented use of executive power. Though the DNU has been used fairly liberally since the country’s return to democracy four decades ago, no DNU has ever contained such a vast array of changes. Moreover, the language of the decree declares an emergency period of two years, meaning that the administration would be able to continue passing certain measures as part of that decree well into 2025. The aggressive use of executive power, combined with repressive new antiprotest laws, seems especially troubling following an election in which both Milei and his running mate Victoria Villarruel espoused apologia for the country’s last dictatorship, responsible for over thirty thousand disappearances of activists and regime critics between 1976 and 1983.

Residents in Buenos Aires took to the streets to protest against the measures on the nights of December 22 and 23. This challenged Security Minister Patricia Bullrich’s new antipicketing protocol, which now authorizes federal forces to break up protests that block the street (known as piquetes), and mandates the creation of a national registry of organizations, leaders, and participants in such protests. Similar marches have taken place in Córdoba and Rosario, the country’s second- and third-largest cities, even as Milei and other administration officials threaten to take away or reduce social benefits and health plans of those found guilty of violating the antipicketing protocols. The waves of cacerolazos, as pot-banging marches are known, had inspired the government to organize a rally in Buenos Aires on Saturday to demonstrate support for the administration, but the decision to gather supporters was quickly reversed.

Some members of Milei’s own coalition, which includes more established center, center-right, and right-wing parties, have expressed discomfort with the DNU and its measures, though often taking greater issue with its use of executive authority than its contents. Senator Martín Lousteau, president of the Radical Civic Union (UCR), which backed Milei in the runoff election, voiced his opposition to the DNU and called for legislation with the same reforms to be introduced on the floor of Congress. Similar calls came from Maximiliano Ferraro, president of the Civic Coalition, a smaller centrist bloc that supported Milei in the general election. Representative Rodrigo De Loredo, head of the UCR bloc in the lower house of Congress, has suggested that the administration compromise by breaking the “megaDNU” into smaller decrees. The administration nonetheless seems confident that it will have the votes necessary to avoid a congressional veto of the plan.

Opposition Mobilizes

Still, there surely are major obstacles in the government’s way. The DNU represents a unique challenge to Argentina’s robust organized labor movement, and to the weakened Peronist coalition that now sits in the minority in Congress. It will automatically take effect on December 28, unless both houses of Congress vote to reject the measure, or the country’s supreme court declares it unconstitutional. If the measures enter into law, the anti-Milei factions will find themselves engaged in a multifront war to protect tenants, workers, students, public health and education, and more. The effective period of the DNU, the liberal use of executive power, and the new administration’s apparent appetite for police repression paint a grim picture for social democracy in the Argentine Republic.

That said, a multifront war for the opposition is a multifront war for the administration as well. Numerous organizations released statements or took to the streets within hours of the announcement, ranging from unions like the State Workers Association (ATE), Bank Employee Association, and Confederation of Education Workers (CTERA), to activist groups like Inquilinos Agrupados (a tenants’ rights organization), Polo Obrero (a labor rights group), Somos Barrios de Pie (a grassroots community network), and the communist political group Corrientes Clasista y Combativa. The Center for Pharmaceutical Professionals has announced that it will be petitioning the courts to declare the DNU unconstitutional. The General Confederation of Labor (CGT), the nation’s largest labor union, has already filed multiple injunctions with the same intent. As Mariano Martín reports in Ámbito, the CGT held a board meeting last week with over fifty other unions, where it began to plan the rest of its response to the DNU. The organization is for now placing heavy emphasis on its legal strategy to try and prevent the measures from taking effect, even if only in part. They have also planned a general strike in February, which will include both extant working groups of the CGT and the Popular Economy Workers’ Union (UTEP), which should guarantee strong attendance.

Also in attendance at the meeting were members of the opposition Unión por la Patria. This Peronist coalition, which currently has 102 of 257 seats in the lower house of Congress, and thirty-one of seventy-two in the upper chamber, holds the immediate fate of the DNU in its hands. The unease among the independent parties that helped bring Milei to power opens the door to a Peronist victory in Congress. If they can gather the votes to achieve simple majorities in both houses, the DNU will not pass.

However, despite the mathematical possibility of victory, it remains to be seen whether this coalition will manage to join forces with anti-Peronist legislators. Figures like Ferraro and Lousteau have both voiced opposition to the decree in part because of concerns about the consequences of this expansion of executive authority, should Peronism return to power in the future. That fear may not be enough to create an oppositional consensus.

Milei garnered support from the center in November’s runoff election precisely because of his strong anti-Peronist sentiment — a rallying cry able to unite his far-right La Libertad Avanza with UCR, Propuesta Republicana (PRO) and other parties that had originally rallied behind Bullrich for president. In the runoff election, they sided with Milei over Peronist candidate Massa even though the far-right candidate was running on a platform much more extreme than the one he is today advancing by decree. An even temporary split with Milei’s agenda would represent a marked shift in their attitude toward the administration.

Manufacturing Consent

Regardless, the independent parties in Milei’s coalition and the opposition forces both recognize the same danger: it is exceptionally difficult to organize meaningful resistance to this kind of use of executive authority. The precedent this order would establish would completely change the role of the presidency in Argentinean democracy. Milei, however, has little recourse but executive power if he is to enact the parts of his agenda he values most. His La Libertad Avanza only holds seven out of seventy-two seats in the Senate. The closely aligned PRO only has six, leaving twenty-six seats independent from the opposition block of thirty-three. In the lower house, the government only holds 78 of 257, much less than the Peronist coalition.

This situation highlights a fundamental contradiction at the heart of Milei’s administration. He was decisively elected president, yet few of his ideas are actually popular. He rode to victory on a wave of resentment at Argentina’s elites, promising to make “la casta” pay for their decades-long mismanagement of the country; that very caste now runs his administration. Former president Mauricio Macri, the neoliberal who ran the country from 2015 to 2019, has played an integral part in staffing Milei’s cabinet with figures like Bullrich, his former security minister, and Luis Caputo, the economy minister who worked with Macri to take out the largest loan in International Monetary Fund (IMF) history — a loan that has been the single biggest driver of Argentina’s inflation and foreign currency reserve depletion over the last four years. Milei’s less militant supporters, who backed him in the election runoff out of frustration with inflation and economic mismanagement, may chafe against some of his more extreme measures, making legislating through Congress a tricky prospect. The reliance on the DNU, coupled with the new antipicketing protocols, paint a picture of what is to come over the next four years of Milei’s presidency: if the administration is to succeed in privatizing national industry, gutting labor protections, and deregulating the economy, it is going to have to rely on executive power and repression.

Of course, no administration can truly rule by diktat alone. Milei will have to find ways to manufacture consent, and give cover to the more “moderate” forces in the country that also want to see his program enacted. For now, it seems that the president’s office will seek to legitimize its authoritarian impulses under the guise of economic necessity. The DNU itself states, “The severity of the [fiscal] crisis puts at risk the very survival of the constituted social, juridical, and political organization, affecting its normal development in providing for the common good.” Bullrich, meanwhile, said following the first implementation of the ant-picketing protocol last Wednesday, “Today, there was free circulation throughout the whole country. . . . People could go to work in peace, and move around without issue.” If Milei is to succeed in his attempts to crush the Left, this will be the path forward for him: to convince the public that the repression of left-wing organizations, unions, and protesters is necessary for the well-being of the economy. The early returns seem to indicate that the public is not buying the line.

Ultimately, the success of the opposition’s response will depend on how willingly the independent parties like the UCR back Milei’s ambitions. Support from the center could further embolden the administration’s authoritarian tendencies. Rejection could equally drive the government to rely even more on executive power. For now, the next phase of the fight depends on the courts. Should they decide that the decree is valid, it will change not only the country’s trajectory for the next four years, but that of Argentine democracy itself long after.