Argentina's Milei's Full Interview At Bloomberg House in Davos

Thank you, President Millé, thank you very much for talking to Bloomberg again.

Last year, I think we discussed free market economics, dogs and the Rolling Stones, but this time we are going to begin with Venezuela.

You welcomed the removal of President Maduro, but the Trump administration seems quite happy at the moment with sticking with Venezuela's interim president, Delcy Rodriguez, who is loyal to Maduro.

And you very much describe the Maduro regime as a narco-terrorist dictatorship.

So, what has changed?

Are you worried that nothing has changed in Venezuela?

No, it's not that way.

First of all, I would like to recognize the tremendous work done by President Trump and Marco Rubio.

So, first, in order to extract the narco-tyrant dictator-murder Maduro,

who also made a point of spreading terrorism across the whole region,

funding campaigns and financing terrorist acts out on the streets, complicating lives for all governments that were not pro-21st-century socialism.

So, I warmly welcome that situation.

On the other hand, I think the plan designed by the U.S. administration

in three phases is quite appropriate.

The first one has to do with stabilization, which is the current phase.

Then will come the reconstruction.

And then, the transition towards democracy.

The thing is, it wouldn't be possible to do it otherwise.

You know, stabilization needs to be done this way.

That is what we are going to do with the United States that have suffered

and continues to suffer the encroachment of the host of the 21st century socialism on the structures of the state.

You see, they basically work, as if there were four police, you know, under 21st century socialism administrations and when they're not in government they act as spies

and they make a point of sabotaging governments that are not uh that do not belong to the ranks

it's very difficult you see in venezuela that would be the case 100 thinking that there could be another possible way of managing the stabilization process truly means not understanding the limits of reality as such so in my view the work being done by the united states is excellent and besides i think it is working it's bearing fruit because we see that

also political prisoners are being released something we welcome and we also hope they will finally release all of the political prisoners we are particularly concerned about the situation of now well gazo from argentina but as we see the positive evolution of the situation we are hopeful that now well will be able to be with us again you know the reason why i asked you flew to

oslo to support maria carina machado when she won the the peace prize and that is do you still support her to be or her candidate edmund gonzalez to be the president of venezuela the thing we need to

understand is that over the course of the stabilization process any alternative

actually the force of the regime indoors will make anything fail otherwise so the way i see it the approach taken by the united states to deal with the situation is the right thing to do the right way to go at this time and well when it comes to rebuilding for democratic transition it will be uh the time to make perhaps other decisions and see how progress can be made towards democratization in

venezuela i mean of course i do greatly appreciate and i'm fond of maria corina who's a great friend and uh defender of liberty but we need for this process to be successful we shouldn't be too hasty and as a result finally going backwards and you still and you still talk with machado and you're still

in contact with her oh yes i'm in contact with her we are friends let's let's look at the economy when when we came here last year you had already bought inflation down from 300 percent to 80 percent now it's at 30 percent you've had a good year in terms of the trade deficit the economy is growing there are two questions though always come back and the first is the currency as you know you are a free marketeer you believe in free free currencies and the question is when will you let the peso go free

and just to be really clear the peso going clear going free does you have broadened the band but a free currency you know as well as i do means without any controls or fx bands when is that going to happen

well the first thing we need to understand is that when you come into office and need to run a country it's not that you start from scratch you need to obviously face history and argentina bears a very bad history on its shoulders argentina has removed 13 zeros from its currency it has had three hyperinflations without a war so there is a primary problem regarding the currency in argentina and that is the

mechanism by which agents economic agents form expectations if we were to work with a traditional rational expectations model like the one we've all studied we have so much celebrated robert lucas junior well so much so you know i've named two of my four-legged uh children after him so you can imagine

do they bark at you every day that you do not set the currency free

i haven't heard them bark because of that and besides i have even much more liberal libertarian versions of me but i would like to note that under normal uh pressure and temperature conditions so to speak the price level in the economy would be governed by the uh money amount and the exchange rate is one more price in the economy strictly speaking we have set the money amount this was in mid 2024 and what

we are getting to feel now is the uh effect the hangover effect after the monetary disaster of the previous administration which printed money in an amount according to 28 percent of gdp and all the most so during the last few months before they left office to win the election you know this is the sort of sequence that prices follow that i'm going to explain let's suppose you have a fall in money demand that leads to a leap in the exchange rate and that leads to an increase in the price of tradables then

in wholesale prices then retail prices and then wages of course if you have spent almost 90 years with that sort of dynamic it's quite likely that people will think that if the exchange rate goes up then the prices will go up too so i won't get angry because of the way people form their expectations because i mean they've been proven right for 90 years so what we are trying to do is to understand that people

can build expectations that way and we understand that volatility in the exchange rate can translate into price volatility let's suppose you have a change in relative prices and tradables become more expensive or perhaps there is a deterioration in the terms of trade and the exchange rate goes up what

will happen then prices will go up so you will see a mismatch between the price level and the money

amount and the economy will slide into recession we understand the problem of volatility so the exchange rate within the band is free it is free within the band it is free and the bands

only serve the purpose of showing to the people that the exchange rate will not be just any exchange rate so then they learn how to float and they lose the fear so that's the role of bands to limit the

volatility but when when when do you do you think this year you will be able to say you have learned you have discovered what the you know that freedom is like now try it properly and float let's float the

peso is what is the timing from my point of view that will be when we've finally cleaned up the money overhang we have had this money overhang because of the hangover of previous monetary policy also due to the capital controls that were put in place in the past and also as a result of the price controls

since we have set and fixed the money amount and we only now print against new demand at one point local inflation will converge towards international levels which means that at that point you have managed to clean up the money overhang and will be in a position to let the peso float freely without any sort of trouble because along the way the agents will have learned and if there is exchange rate volatility and they want to translate that into the domestic prices they will have to face menge's worst face they

will have no demand and will have to deal with it can i ask you the other big test and you know it's a fairly simple question is the international loan markets you have raised money at home domestically but as you know very well the last when your predecessor defaulted on the foreign bonds and so the question is very specific when will you go and raise money in new york or outside argentina a ver nosotros en en rigor

well strictly speaking you know we should need would just be to roll over as a general framework

because argentina has zero deficit in fact the amount related to interest is paid by argentina out of surplus that's a first point and through the tax innocence act we hope to really boost and

develop the domestic capital market therefore our need to resort to funds in foreign markets will be less and less in the worst of cases perhaps we would only be going out to international markets to secure the rollover and besides given argentina's fundamentals we think that

paying a surplus rate or with country risk at 550 basis points we think that is clearly not in line with our fundamentals so since we have a very low debt to gdp ratio because most of the debt is within the public sector and we have achieved fiscal equilibrium we will need less and less access to capital markets aside

from the rollover and with the development of the local market we'll be able to pay and bring down the exposure it's not something that given our fiscal performance should be a great concern i would be worried not to have uh you've got a large enough argentina last year you famously got a 20 billion

swap line from the us the big success when you got it scott besant the treasury secretary said that you had committed to as he put it to getting china out of argentina and you have always been very critical of in china but as you know china still has a space station in argentina you still have a swap line with china what what does getting china out of argentina mean to you in my view um what scott besant said is uh

well in line with the thinking of the united states administration uh and this is a matter related of geopolitics the united states does trade with china and the way we see it china is a great trading partner it means a lot of opportunities for us to expand markets so that is not any source of conflict when the geopolitical time comes do you have any doubt as to where it stands china china china doesn't have a

space station in the united states the last time i checked it does have a space station in argentina

eso no está probado well that's not proven that well china doesn't

i will i will ask president trump whether the chinese have a space station there but if you but in general you know when you were when you were a candidate you were very critical of the chinese

uh but let's put it this way i am president for 47 and a half million argentines and i make the decisions

that best favor the interests of the argentine people so part of that is the fact that argentina which is a very close country the most close country in the world given its gdp per capita argentina should have a trade to gdp ratio of a little over 90 and it only has 90 30 sorry strictly speaking 28 if you want to be accurate consequently my plan is my plan is to open up to the eu to after to the united

states and to china i want an open economy and if you look at the weight of the chinese economy in the world you will understand that i need to trade with china or look at the evolution of india i need to

trade with india well and that's what i'm working on to make argentina definitely a more open country

there's two on the subject trade agreements you have a trade agreement with the us when do you expect

that to be signed we are ready to sign we are working on the fine detail we will have good news

and the other the other one is mercosur which i remember you were somewhat critical of but that is the southern american trading bloc which i know you think could be even freer than it is but it's just done a a deal with the european union which i think you support but do you worry about the effect that could have on argentine industry or when when it opens up the field with europe

when you design policy and that was the uh central pillar of my presentation yes and my address in davos you you see you're designed based on ethical and moral values

so please explain to me why you would justify a situation where argentinas or most argentinas need to pay more for goods they could get more cheaply because it's false and that also destroys jobs that's one of the big lines of keynesian economists who are actually ruining the whole planet whatever they touch they break

when you open up the economy but when you open up the economy there are products that will be cheaper and you might lose jobs here but that lets individuals spend less money

for example in argentina used to pay forty dollars for a t-shirt when it's actually uh only five dollars and the money you save you will spend elsewhere in another sector you will create jobs in another economic sector that people are interested in and this will lead to high productivity so when you open up the economy you will see a reallocation of resources but there will be productivity gains due to greater division of labor and higher specialization otherwise if the protectionist argument were true one day we would decide to close up argentina i will borrow an example

from my brilliant excellent wonderful deregulation minister that's taken from one of his books i used to read him i used to always be a big fan of federico schwarzenegger so he said okay so let's close up argentina and then um narrow it to the province of buenos aires and then further down to the city of buenos aires and then to palermo which is just one district and then it will be just a couple of blocks and the end result of this will be full autarky you will live

all by yourself what will your life be like miserable because you'll have to make your own shoes your own socks your own suits your own ties your own shirts how do you think you're going to live badly so trade creates a division of labor that leads to increasing returns leads to productivity gains and to well-being this is why more open countries are what it is in the most close

country so we have a lot to do i that was a very eloquent defense of free trade which i should point out very not enough other people do but next door to you you have brazil where i think it'd be fair to say there is a much more keynesian approach with your friend or not that friend uh president lula he's up for election this year what what mending that relationship with brazil is that a priority or do your your dogs just bark every time you mention him are you going to call one of your dogs lula

i would never call my dog anything left wing i really love my dogs too much to insult them

this is why they have all been named after liberal iconos murray rothbard milton for milton friedman robert for robert lucas jr and robert again for robert lucas jr and conan which is the barbarian warrior that's the original dog but apart from that we have an adult relationship i mean this is not some kind of ideological paper-based battle in the middle we have the lives of millions of human beings so we

continue to advance but we have really given a lot of a boost to america so for it to be more flexible and dynamic signing the deal with the eu took 25 years time that's a very long time and the world of today needs more speed it needs to move faster so this is why we have also encouraged working with a lot more flexibility we need to adapt this is not a matter of whatever suits the bureaucrats you know

those who just uh take up seat space and collect tons of dollars in order to do nothing because again for a bureaucrat the result means nothing and the process is everything and people need results so we work in order to generate results for the people so whatever helps improve trade we will do i will not be breaking anything whatever helps gain more trade i will do and if other countries decide to take other

decisions well they're sovereign it's up to them to do whatever they please i work for the well-being of

the 47.5 million you look at last in america when you when we first met you know you were the you were a soul voice on the right if we call it that way um since then i was uh more lonely than adam on mother's day now i have got a few friends um yes that's a very good parallel um chile and since then chile in bolivia you have you have two friends and then cain of course yes and then but then you have chile in bolivia and now you have a we do have elections in colombia and brazil have you identified people

there who you want to support to carry on the same kind of wave of reforms that you would hope

to see change in latin america the decision is up to every people to decide whether they want to

follow the path of socialism you know thomas sold said you know what is the best thing about socialism that it sounds nice but you know what the problem is it always fails so each society will awaken to the light of the ideas of freedom whenever it can and i'm optimistic that they will become aware that the best thing you can do is espouse the ideas of freedom and we can exemplify this with argentina we had inflation increasing one percent a day so we were headed to

seventeen thousand percent we halted fiscal deficit which was five percent of gdp in the treasury we we halted that in the first month it would have seemed impossible but it was not impossible for the world's best economy minister toto caputo and the best minister we've ever had in our history in only six months time we fixed the quasi-fiscal deficit and we also stopped the money amount of printing money now we are looking at 24 25 depending on whether you take the wholesale rates um so everyone was

predicting a hyper recession but argentina reached a floor in april and then started to grow strongly the latest figures show the economy growing at 4.2 percent we have lifted 30 percent of the population out of poverty 15 million people have been lifted out of poverty what does this mean that the free

market works that free market capitalism works because those are the fundamentals i referred to

yesterday in my davos address free enterprise capitalism is not only just and efficient but it also lets the economy grow more and when you design policies on the basis of ethical and moral values the western values you thrive and you also enjoy social consensus because you're doing what is just what is fair one of the things

is that you can't possibly kill justice on the altar of efficiency whether it be parito

efficiency or the efficiency of machiavelli's political calculus this is why i said yesterday that machiavelli is dead and we need to bury him because what we are proving is that when you design policies on the basis of ethical and moral values and when you do what is just not what best suits the political political rubbish people who work only on the basis of political speculation that's how you gain support we got 41 percent of the vote a 17 percent lead over kirchnerism which in a general

presidential election would mean winning on the first round and the latest surveys show that 62 percent of argentines support free market economy and you know what it works and it is only just

president mille there's there are many things that you can defeat but one of them perhaps the most socialist things of all is time and we have sadly run out of it thank you very very much for for talking to us um please can you all we we have to get president mille out very quickly so can you stay in your stay in your seats and then we will go out thank you