Milei vows ban on funding public spending with monetary issuance

President Javier Milei announced on Friday that he will ban the Treasury from financing public spending through monetary issuance as a way to safeguard Argentina’s fiscal surplus.

Milei, 54, delivered a cadena nacional nationwide broadcast late Friday, just days after vetoing a rise in retirement and disability pensions approved by Congress. The measures, he said, aim to “fortify the zero deficit target and the government’s monetary policy”.

The President also vowed to send a bill to Congress to punish those who approve budgets that imply debt.

“In the coming days, we will take two measures to implement zero deficit: on Monday, I will sign a decree prohibiting the Treasury from financing spending through monetary issuance. The Treasury will not be able to borrow money from the Central Bank. We have already implemented this, but now we are making it official,” Milei emphasised.

The second measure, he said, will be to “introduce a bill to penalise the approval of budgets with fiscal deficits”.

In addition, the head of state argued that “every peso they want to take has to have the name and surname of the person they want to take it from”.

“What Congress wants to impose would force us to issue money,” complained Milei, who used the broadcast to justify his recent vetoes of pension increases and the declaration of a disability emergency. Congress can insist on these measures, but must secure a two-thirds majority in both chambers.

Last year, Milei achieved Argentina’s first fiscal surplus since 2010 thanks to strict austerity measures. He has also reduced the country’s high inflation rate from 79.8 percent in the first half of 2024 to 15.1 percent in the same period of 2025.

“My task is not to seem good, but to do good, even if the cost is that they say I am cruel,” Milei declared.

The remarks come with tensions rising ahead of crucial midterm elections in October.

Milei’s government suffered another parliamentary setback midweek when the Chamber of Deputies gave preliminary approval to bills that would increase the budgets of national universities, declare a state of emergency at the prestigious Garrahan paediatric hospital, and repeal decrees that had closed or modified various national institutes and bodies. Senate approval is still required.

In this context, Milei also announced that he will send — without specifying when — a bill to “penalise the approval of national budgets that incur a fiscal deficit”, which will also sanction lawmakers and officials who “do not comply with these new fiscal rules”.

Milei is seeking to expand his minority presence in Congress in the October midterms, with his party currently holding 39 of 257 seats in the Chamber of Deputies and six senators plus one ally in the 72-seat upper house.

– TIMES/AFP/NA