BUENOS AIRES, Argentina (AFP)— Argentina’s President Javier Milei took office Sunday with a stark warning to citizens to brace themselves for painful austerity measures as he seeks to cut spending and curb triple-digit inflation, all with empty coffers.

The 53-year-old libertarian addressed thousands of supporters from the steps of Congress, who waved flags and chanted “freedom!” and “chainsaw!” in reference to the power tool he carried around on the campaign trail to symbolise spending cuts.

“There is no money,” said Milei, vowing to put an end to “decades of decadence” by his overspending predecessors who he said had left him “the worst inheritance” of any prior government.

Latin America’s third-biggest economy is on its knees after decades of debt and financial mismanagement, with annual inflation at 140 per cent and 40 per cent of Argentines living in poverty.

Milei said his election was a turning point in history like “the fall of the Berlin wall,” and that the only solution for the economy is “shock treatment.”

“We know that in the short term the situation will worsen. But then we will see the fruits of our efforts.”

Milei — a self-described “anarcho-capitalist” — warned of spending cuts equivalent to five per cent of gross domestic product in a country where millions receive welfare handouts and have become accustomed to hefty energy and transportation subsidies.

During his swearing in he received the presidential sash and baton, which was personalised with the faces of his five dogs — cloned from the cells of a beloved, deceased mastiff — carved into the handle

After his speech Milei made his way to the Casa Rosada (Pink House) presidential palace, waving to supporters and flanked by his sister Karina, his closest confidant and whom he has appointed secretary to the president.

He again addressed the crowd as he appeared on the balcony, singing “I am the lion” and chanting his slogan “Long live freedom, damn it!”

Earlier, Milei spoke briefly to Ukrainian President Volodymyr Zelensky on the steps of Congress, and the two men shared a warm embrace.

Also attending the ceremony was Hungary’s nationalist prime minister, Viktor Orban — the only EU leader who has maintained close ties to Russia.

“The Right is rising not only in Europe but all around the world,” Orban wrote on social media, sharing a picture of a meeting with his “good friend,” Brazil’s far-right ex-president Jair Bolsonaro, also in town.

The cabinet was the first victim of Milei’s symbolic chainsaw, as he cut the number of portfolios from 18 to nine, and swore in his new ministers.

Milei’s inauguration caps a meteoric rise for the former television panelist who entered politics only two years ago.

His rants against the “thieving” establishment fired up voters and drew comparisons to leaders like Bolsonaro and former US president Donald Trump.

With his deliberately disheveled mop of hair and rock star persona, he would wave a powered-up chainsaw at political rallies, vowing to “dynamite” the central bank and replace the ailing peso with the US dollar.

However, with few lawmakers from his party in Congress, Milei has softened many of his stances since his election, and allied with politicians he previously insulted, incorporating some into his cabinet.

Economy Minister Luis Caputo and Security Minister Patricia Bullrich held their respective portfolios under former president Mauricio Macri (2015-2019), with whom Milei has forged an alliance.

Talk of shutting the central bank and dollarisation, meanwhile, has dissipated.

Among the questions hanging over Argentines’ heads in the coming days will be whether Milei will devalue the strictly controlled peso and loosen the currency controls which have birthed a multitude of dollar exchanges.