Milei’s chainsaw austerity will not apply to Israeli residents of Argentina. Meanwhile, Israel’s national water company controls more and more of Argentina’s water supply.
Just two days day before Israel launched its first series of attacks against Iran on June 13, Argentina’s faux libertarian president Javier Milei was in Jerusalem to receive the Genesis Prize in a special ceremony at the Knesset. The award, often referred to as the “Jewish Nobel”, includes a $1 million cash prize that Milei said he will donate to programs aimed at fostering closer relations between Latin American nations and Israel.
With the world’s sixth-largest Jewish population, Argentina has traditionally been a close ally of Israel. In fact, the southern Argentinian region of Patagonia was on the short-list of candidates for the founding of a Jewish state in the late 19th century.
Relations between the two countries have only got stronger since Milei, an aspiring Jewish convert with close ties to the highly influential Chabad Lubavitch movement, took over as president in December 2023. One of his first acts in government was to cancel Argentina’s entry into the BRICS-plus association before it even happened and align Argentina with the US and Israel. Months later, his government would apply to become a NATO “Global Partner”.
“Freedom, Democracy and Western Values”
When Israel and Iran locked horns in April 2024, Milei called an immediate cabinet meeting in Buenos Aires that he then allowed Israel’s ambassador to Argentina to effectively chair. After that meeting, Milei told a veteran journalist off record that Argentina “cannot be neutral in the Third World War.” When it comes to Israel, Milei has never been neutral, as he was happy to remind the members of the Knesset during his acceptance speech for the Genesis Prize:
Unfortunately, I am not fortunate enough to be here in happy times; with the Hamas attack on October 7, 2023, the Israeli people have been victims of the most aberrant aggression in the last 80 years and the entire free world has witnessed the face of the most abject barbarism…
Argentina is not going to stay on the sidelines. As I announced in my first participation in the UN, Argentina will raise its voice and strengthen in favour of the defence of our fellow human beings. The nations that defend Western culture, our way of life, our political and civil understanding based on the defence of freedom, property and life, have to be together and align ourselves to guard that legacy, establishing new political, commercial, cultural, diplomatic and military ties: an alliance of free nations.
I have said from the beginning of my administration that I consider Israel, together with the United States, our most important strategic partner. Our present agenda is diametrically opposed to that of previous governments, which – disregarding the unbreakable bond between our peoples – decided to make pacts with dictatorships of all kinds. They made common cause with oppression, despotism and intolerance, perhaps because that is where they wanted to direct the destinies of our nation. We choose freedom, democracy and Western values, the same maxims that Israel defends in a region where they are so scarce.
During his latest stay in Jerusalem, Milei prayed at the Wailing Wall for the second time since taking office. He and his sister met with Prime Minister Benjamin Netanyahu and senior members of his cabinet, though details of the meeting were not released. One of the results, however, was the signing of a “Memorandum in Defence of Freedom and Democracy against Terrorism and Anti-Semitism” that reaffirms the strategic alliance between Argentina and Israel.
The Memorandum sets the stage for unprecedented cooperation against terrorism, cybercrime investigations, establishing fast-track customs lanes, joint satellite launches and water technology centres on the Paraná River, Argentina’s most important trade and transport waterway. As readers may recall, the Milei government has already signed an agreement with Washington allowing for the stationing of members of the US Army Corps of Engineers along the Argentine sections of the river.
A commercial agreement was also signed that establishes direct flights between Buenos Aires and Tel Aviv. According to La Nación, the memorandum have been designed to deepen security ties and innovation cooperation not only between Israel and Argentina but throughout the Southern Cone:
Hence, the Memorandum has also been baptized as the “Isaac Accords”, as if it were something similar to the “Abraham Accords” sealed by Israel and several Arab countries in the Persian Gulf region, but in the far south of the Latin American continent.
On June 12, the Milei government made official a long-standing proposal for a social security agreement with Israel that will enable the payment of welfare benefits to Israeli citizens with residency permits in Argentina. The measure was first drafted in 2017 by the then-Mauricio Macri government and was enacted by the Milei government in May 2024. But it wasn’t included in Argentina’s official gazette, and thereby fully activated, until June 12.
The agreement means that any Israeli citizen with legal residence in Argentina will be able to receive pensions, retirements and social benefits such as maternity, disability and other contributory benefits. In exchange, any Argentine citizens residing in Israel will be able to access the social security system of that country, in a reciprocity scheme.
This kind of reciprocal arrangement is standard practice for countries around the world, and Argentina has already similar deals with many other nations. Generally speaking, they make life easier for individuals who have worked in multiple countries by preventing dual taxation of social security and addressing gaps in benefit coverage. However, this particular agreement between Argentina and Israel is controversial, for at least four reasons:
- Israel’s near-pariah status. Israel is committing a genocide in Gaza and its prime minister and former defence minister are currently wanted for the crimes of starvation as a method of warfare and of intentionally directing an attack against the civilian population of Gaza. Seeking closer strategic alignment with a country that is verging on pariah status is not a good look. Even the EU has released a report, far too late in the day, corroborating UN allegations that Israel is guilty of “indiscriminate attacks … starvation … torture … [and] apartheid” against Palestinians;
- Timing. The arrangement became official literally the day before Israel attacked Iran in an unprovoked act of aggression — the “ultimate war crime” according to the Nuremberg Tribunal and the US Prosecutor Justice Jackson. Given the escalating wars in their direct neighbourhood and the bombs dropping directly on Tel Aviv and Haifa, many Israelis are presumably looking for a bolthole. With its already large Jewish community, Argentina would fit the bill nicely, especially given its new direct air connection with Tel Aviv and reciprocal social security agreement.
- Where’s the money? According to Milei, there is no money left in his government’s coffers, which is why his government has slashed spending on public goods like education, healthcare, transport and infrastructure. As Diario Notes, “it is striking for many Argentines that while benefits are cut to the local citizens themselves, new expenditures are enabled in the name of international reciprocity.”
In February, the government dismantled the palliative care program of the National Cancer Institute. It has ripped funding from hospitals, universities and scientific research centres and slashed public subsidies for public transport and energy, including for low-income households.
As we noted at the time, the economic pain being visited upon millions of Argentinean workers and pensioners is not an unfortunate by-product or unintended consequence; it is the intended goal — to impoverish workers and pensioners to the point where they cannot fill their shopping basket or buy even the most basic of necessities. If you starve the economy of demand, inflation eventually has to go down. Which it has, albeit at the cost of almost killing the host.
Indeed, Milei’s chainsaw austerity has been so brutal that it has even begun to hit the quality of bank credit, as Bloomberg reported a couple of weeks ago:
Banks in recent weeks started recording initial signs of credit deterioration. Overdue credit card balances climbed to 2.8% in March, the highest in three years, while defaults on personal loans jumped to 4.1%, the highest in nine months, according to the country’s central bank. The number of bounced checks is on the rise, too.
Overall, bad debt charges across Argentina’s financial system reached a five-year peak when measured as a share of total assets, the central bank data show.Stress is also building among corporates, with an increase in business defaults pointing to more troubles ahead.
“No hay plata” (there’s no money) is one of Milei’s most common slogans. But it depends what for. There’s still money to buy second-hand F-16 fighter jets from the US, via Denmark. There’s also money for the ever-larger riot police operations needed to violently suppress public protests, including the hundreds of elderly retirees who gather outside parliament every Wednesday to demand higher pensions.
And there’s money for Israeli citizens to access state-funded pensions and other social benefits — at a time of rampant austerity for Argentina as a whole. As the Mexican media outlet Milenio notes, this is another gesture from Milei of Argentina’s geopolitical realignment:
We are seeing a huge wave of cuts to social spending for the majority of the Argentine public, hitting medicines, university budgets, basic subsidies, and the Milei government decides to activate a policy that allows these kinds of additional contributions from the Argentine State — all on the basis of a supposed international reciprocity.
But as we have been arguing for the past year and a half, it is far from clear how Argentina — as in the people, not the government — is benefiting from any of these realignment efforts, whether with the US or Israel. With regard to the latter, the risks are clearly rising as the Milei government maintains its full-throated, uncritical support of Israel’s genocidal regime even as it starves Gaza to death and launches an unprovoked attack against Iran, which could ignite a regional, if not world, war…
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Nick Corbishley 