Just a few minutes of walking through the Argentine capital, Buenos Aires, is enough to feel the division: optimism versus skepticism, approval versus disapproval. "Entry prohibited" is written on the posters in a shop where President Javier Milley and Security Minister Patricia Bullrich are not welcome. However, a new apartment building is being built nearby - an investment in the future. The feeling of upswing is a fact.
Javier Milley has been in office for 500 days. And hardly any other head of state has attracted as much attention worldwide as Argentina's libertarian president. Sometimes left-wing supporters greet him with outright hatred - because of his liberal economic course, but many economists see him as something of a liberator of a country mired in bureaucracy and regulations.
Removal of currency restrictions
Milley's latest success is the end of the so-called "cepo" ("shackles" in Spanish). "Cepo" was a tool used by a number of Argentine governments since 2003 in the fight against inflation to limit access to the much-desired US dollar. In mid-April, "shackles" were lifted, allowing individuals and companies to carry out currency transactions without restrictions.
"Contrary to the alarming predictions of many local and international economists and analysts, the exchange rate has not skyrocketed", Aldo Abram of the Fundacion Libertad y Progreso think tank in Buenos Aires told DW. "On the contrary, the exchange rate has stabilized below the level before the opening, trade has normalized, without a crisis or devaluation," he added.
The government celebrated this with a photo of Milley and his Economy Minister, Santiago Caputo, posing as goal scorers.
Milley asks for more patience
The president himself believes he is on the right track: "After more than a hundred years of chronic budget deficits, we are now one of the five countries in the world that spend only what they earn, and not a peso more," Milley said in a televised address a few days ago. He announced the end of currency restrictions and promised his compatriots a better future: "In the next 30 years, Argentina will be the country with the highest economic growth. This will not happen overnight, but will happen gradually and with the confidence that we have done our homework.
A positive fact is that, according to the statistics authority INDEC, poverty has decreased to 38.1 percent, which is slightly below the poverty inherited from the previous government. According to INDEC, inflation has also fallen under Milley's rule in 2024 - by 44.5 percent compared to the previous year.
Svenja Blanke from the Friedrich Ebert Foundation in Buenos Aires, which is close to the German Social Democrats, is skeptical about Argentina's economic development. In an interview with DW, she criticized the government for "using the exchange rate to slow inflation." This has made the peso stronger, as a result of which a "Big Mac" in Argentina costs 5.48 euros - about the same as in Germany. But the minimum wage of 1.06 euros per hour is far below the German minimum wage of 12.82 euros. "So there is a kind of social slaughter that mainly affects income, education policy, research, culture, public infrastructure, etc.," criticizes Blanke.
Hans-Dieter Holzmann of the Friedrich Naumann Foundation in Buenos Aires is more optimistic: "With the removal of capital controls and the new, more flexible exchange rates, important obstacles to Argentina's economic recovery have been removed," he told DW.
The two faces of Argentina
The two faces of the country can be seen in the center of the capital: full restaurants and cafes that do not fit in at all with the opposition's talk of a crisis. Few people took part in the general strike held a few days ago, and the unions seem to have played it safe with the three general strikes organized since Milley took office. The majority of Argentines want to move forward, work and leave the crisis behind.
On the other side are the pensioners, who are feeling the effects of the austerity policy in their pockets. They see their purchasing power decreasing and go out to demonstrate every week. Their protests seem to refute Milley's promise that only the "caste", i.e. the elite and influential people from the Peronist camp, who ruled the country until December 2023, will have to pay for the reforms.