Argentina’s President Javier Milei has warned political leaders to support his reform push or face conflict. He summoned provincial governors and other political leaders to sign a “foundational pact” outlining an extensive libertarian reform agenda for the country. The pact, known as the “May 25th Pact,” centers on 10 principles including fiscal balance, tax reform, private property rights, reducing public spending, labor reform, pension reform, and opening up to international trade.
Mr. Milei emphasized that he would push through the economic reforms with or without support from political leaders. He also warned that refusing to sign the pact may lead to conflict. He acknowledged that it would take time to see the results of the economic reorganization and reforms, but he remains convinced that they are on the right path to address the root cause of the country’s fiscal deficit.
U.S. Treasury Secretary Janet Yellen described Argentina’s transition as tough and promising, acknowledging the challenges faced by the new government. The International Monetary Fund (IMF) is engaged in talks with Argentina about a possible financing program to support the country’s stabilization efforts. Meanwhile, Mr. Milei is working to accelerate the abolition of capital controls, with the IMF urging measures to devalue the peso and maintain interest rates above inflation. The IMF praised Argentina’s efforts as bold and ambitious compared to previous measures.