In the Argentine presidential race, the victory by ultraliberal candidate Javier Milei drew mixed reactions abroad, and it was not warmly received in the halls of power. A concise seven-line note from the Ministry of Foreign Affairs offered a neutral milestone: I wish Argentina success in the new phase where Argentines speak democratically. The exact name of the new president was not disclosed in that message.
When compared with Spain’s congratulatory messages to other Latin American leaders, the contrast stands out. In October, Spain expressed warm wishes to Ecuador’s newly elected president Daniel Noboa, while a public note from Madrid to Guatemala’s Bernardo Arévalo emphasized a promising path for democracy and social justice. By contrast, Madrid has largely stayed silent toward Milei since November, a stance aligned with concerns voiced by some over the rise of far right movements and extremism on the global stage.
Spain also adjusted its level of representation at Milei’s inauguration, sending former Latin American Foreign Minister Juan Fernández while King Felipe VI represented the state. Attendees included notable figures such as Santiago Abascal of Vox and Cayetana Álvarez de Toledo of the Partido Popular, highlighting internal political dynamics within Spain itself.
Mercosur and CELAC
The question since Milei’s rise has been the direction of his policy, especially given his campaign rhetoric that suggested a more radical stance. Observers have noted signs of moderation in some of his proposals, particularly in relations with neighboring countries that span left to center governments. Milei previously voiced skepticism toward Mercosur, the regional bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Bolivia, and Spain has pushed for the EU Mercosur free trade agreement, a process that stalled under European hesitations. Critics argue that France has been wary of South American agriculture and livestock sectors, complicating regional trade ambitions.
Analysts like Anna Ayuso from Cidob suggest that Milei shifted once his presidency became a real possibility. She notes that while his economy and foreign affairs ministers initially signaled caution toward Mercosur, the stance seemed to soften as the transition approached. In contrast, Alberto Fernández’s approach to the bloc was more resistant to change than Milei’s, according to the same sources.
Meanwhile, Pedro Sánchez had cultivated a steady rapport with Milei’s predecessor, Alberto Fernández. A CELAC summit press conference reflected a moment of tension when Sánchez attended a San Sebastián rally instead of accompanying Fernández, who later explained his absence in terms of campaign commitments. The episode underscored the delicate balance between election cycles and international diplomacy, a dynamic that Milei’s leadership now navigates differently.
Opportunities in Privatization and Customization
Milei signaled an intent to pursue major privatization again to raise funds, describing a scenario where there is limited alternative to deregulation paired with swift policy shocks. The central question for observers is whether European investors, especially Spanish firms, will be drawn to buy stakes in Argentine companies at favorable prices despite broader risks. Ayuso remarked that while bilateral trade has persisted in recent years, growth outlooks remain tepid given the current economic climate.
Spain benefited from privatizations during the 1990s under Carlos Menem, transitioning a wide range of sectors into private hands. Critics point to the risk of creating oligopolies that could lead to higher consumer prices and reputational strains for national pride. The trend of privatization was later reversed to varying degrees by subsequent Argentine administrations, with notable episodes such as the 2012 nationalization of Repsol YPF after a long international dispute. The outcome left a lasting impact on Argentina’s energy and investment landscape.
Within Spain, there is concern that liberalization plans in other sectors could impact traditional regional industries, including Galicia’s fishing sector, a topic reported by regional outlets. The broader regional implications of Milei’s agenda continue to provoke discussion about national sovereignty, economic structure, and social welfare.
Chinese Gap
Markets have not reacted negatively to Milei’s victory or to the policy path he outlined, including reforms that align with IMF recommendations. A cautious stabilization appears to be taking hold as reforms unfold, though the long-term trajectory remains uncertain. Milei’s approach toward China has been a focal point, with early talk of a possible realignment. He has paused on formal BRICS engagement but has not ruled out future shifts. Beijing’s financial moves, including currency arrangements, have added to the complexity of Argentina’s external finances, given the heavy export flow of beef, soybeans, and lithium to Asia.
For Europe, particularly Spain, there may be room to deepen material ties with Argentina, ensuring stable raw material flows in a diversified supply chain. This aligns with a strategic autonomy framework discussed in Brussels and Madrid, a recognition that diversification strengthens economic resilience after experiences with supply shocks in recent years.
Overall, Milei’s presidency is shaping a new chapter for bilateral relations with Europe and Asia. The evolving mix of privatization, regional trade considerations, and international partnerships will determine Argentina’s path through a period of rapid political and economic change.