He Milei government celebrates the semi-adoption of the 2026 budget by MPs, despite rejecting a chapter that was essential for the liberal-libertarian leadership.
The government’s intention was to cancel by law a significant part of public spending, limited to, among other things, funding universities, disability and debts to provinces.
Everything that is contained in it Chapter 11 of the draft budget. The parliamentary political dispute prevented this goal and many speculated about a possible presidential veto of the budget law.
Authoritarians don’t like that
The practice of professional and critical journalism is a mainstay of democracy. That is why it bothers those who believe that they are the owners of the truth.
However, the government is still happy, because the greatest expense that will arise from not eliminating the contents of Chapter 11 will be caused by the logic of the “chainsaw”, that is, by the continuity and Deepening fiscal adjustment.
It is being celebrated that the government will have a budget law for the first time after two years in office, a demand from international organizations, creditors and potential investors.
The budget law contains the authorization for foreign debt of foreign legislation in the amount of the equivalent of 36,000 million US dollars at the current exchange rate.”
The budget gives legality and legitimacy to government actions, a prerequisite for the legal certainty demanded by big business. What matters is not the “seriousness” of the budget bill, but the instrument in general.
In addition, the budget law contains the authorization for foreign debt under foreign law in the equivalent value of U.S$ 36 billion at the current exchange rate.
In this way, the legislature authorizes the executive branch to borrow in an attempt to make up for the shortage of foreign currency to meet next year’s maturities.
The pressure from the IMF and creditors is aimed at strengthening international reserves, which have a negative balance.
The government does not purchase foreign currencies to avoid an increase in the exchange rate and its transmission to prices, which is one of the government’s main policy advantages in reducing inflation.
With the change in exchange rate policy, Milei and Caputo are now committed to this Buy currenciesthey say: 10 billion US dollars.
Of course, the correction of the exchange rate bands favors a devaluation process that can affect price increases.
In this context and to avoid other problems, the government urgently calls for the introduction of foreign currencies to cover the maturities of external debts.
“The correction of the exchange rate bands favors a devaluation process that can affect price increases.”
The ideal, according to the ruling party, is the entry of investors into the production and export of common goods, be it in agriculture, mining or energy.
Given the difficulties in generating real foreign exchange earnings, whether due to an insufficient positive trade balance or through external investment, the shortcut is debt collection, a historical condition since the genocidal dictatorship (1976).
A public debt that has been restructured in every constitutional amendment since 1983, except under the conditions of the popular rebellion at the end of 2001.
For this reason, the local productive and capitalist development model led by Milei is based on a primary export character plus external financing, which increases dependence and subordination to the capital regime.
Therefore, a few setbacks in parliamentary activity are not enough. The challenge for a different economic direction is based on the popular actions of Confrontation with official politicslooking for a political alternative: an open topic.
Public debt is the prerequisite for maintaining socio-political expectations while promoting structural reforms that require external investors and large capital, particularly labor reforms.
In this framework, social struggle acts as an antidote and unstable electoral and parliamentary successes, while at the same time it is seen as a practice and experience towards a new political-social identity that gives meaning to the aspirations of the population.
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