Milei Shakes Up Argentina: Plans To Drop Peso, Faces $16.1B Oil Fine, Stakes Falklands Claim

Just three days after winning an unexpected election run off result, Argentina‘s far-right president-elect Javier Milei is already making international waves.

At home, he plans a wave of privatizations of national companies and has pledged to put a halt to public works, curb benefits and close down several ministries in order to cut public spending.

He also wants to abandon the country’s domestic peso currency in favor of the U.S. dollar. He even — whether in jest or not — suggested “blowing up” the central bank, which he blames for printing currency and driving the country’s triple-digit inflation: currently running above 140%.

Markets appeared pleased with the result. The day following the election result, the Global X MSCI Argentina ETF ARGT, an exchange-traded fund that tracks Argentine equities, gained 10%.

Also Read: Milei’s Election Win Fuels Major Gains in Argentine ADRs, ETFs

YPF Seizure And U.S. Fine

On Wednesday, the focus of his already controversial leadership was the planned renationalization of oil company YPF YPF. The company is at the center of a dispute arising from the 2012 seizure by then-President Cristina Fernández de Kirchner of a 51% stake, previously owned by Spain’s Repsol.

Two investors, Peterson Energia and Eton Park Capital, were awarded $16.1 billion, while Burford Capital, which funded the litigation, has claimed it is owed a large portion of their damages.

However, on Tuesday, Argentina managed to persuade a U.S. judge not to enforce the fine as it plans to appeal, saying the payment would cripple the country further.

Falkland Islands

Milei has also ruffled feathers in the U.K. after claiming sovereignty over the Falkland Islands, which lie a few hundred miles off the Argentine coast, and which the Argentines call Islas Malvinas.

“Argentina's sovereignty over the Malvinas Islands is non-negotiable. The Malvinas are Argentine,” he said in a TV debate.

“Now we have to see how we are going to get them back. It is clear that the war option is not a solution. We had a war — that we lost — and now we have to make every effort to recover the islands through diplomatic channels.”

In response, the British government issued a statement through the prime minister Rishi Sunak‘s office saying: “The UK government will continue to proactively defend the Falkland islanders' right to self determination.”

Milei will be sworn in on Dec. 10, with another controversial figure by his side as vice president. Victoria Villarruel, born in 1975 to a military family, has defended officers convicted of crimes during the 1976-1983 military dictatorship.

Now Read: Bitcoin Surges After Javier Milei Elected President Of Argentina

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