Madrid has permanently withdrawn its ambassador to Buenos Aires, Spanish Foreign Minister Jose Manuel Albares announced on Tuesday, deepening a conflict over disparaging remarks made by Argentine President Javier Milei in Madrid.

Albares also stated that the charge d’affaires will now lead the embassy in Argentina.

On Monday, Spain recalled its ambassador to Buenos Aires for consultations following derogatory comments made by Milei about Spanish Prime Minister Pedro Sanchez's wife, Begona Gomez.

The incident occurred during a far-right rally in Madrid organized by the Vox party, where Milei labeled Gomez as "corrupt."

Spanish Foreign Minister Jose Manuel Albares demanded an apology from Milei and criticized his behavior as severely damaging the relationship between Spain and Argentina.

"With his behavior, Milei has brought the relationship between Spain and Argentina to its most serious state in recent history," Albares said in a statement. 

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Other Spanish ministers condemned Milei's speech, in which he also described socialism as "cursed and carcinogenic."

Milei's spokesperson later stated that the president would not apologize and suggested that Spanish officials should retract their insults against him.

Milei's visit to Madrid breached diplomatic protocol as he refused meetings with Spain's King Felipe and Prime Minister Sanchez, instead promoting his book alongside Vox leader Santiago Abascal.

Josep Borrell, the EU's foreign policy chief criticized Milei's comments, stating that "attacks against family members of political leaders have no place in our culture," while Spain's opposition party the People's Party (PP) argued that Sanchez should have addressed the corruption allegations against his wife sooner.

A city court is investigating these accusations, although Madrid's prosecuting authority has appealed to dismiss the case due to insufficient evidence. Sanchez, who leads Spain's Socialist Party, decided to remain in office after deliberating for five days following the announcement of the probe against his wife.

Since Milei assumed office, the economic crisis in Argentina was further exacerbated. The poverty rate rose from 45% to 57%, and child poverty is expected to climb from 62% to 70%​ due to austerity measures and cuts in public spending.

Last December, Milei revealed a series of measures to deregulate the country's struggling economy, eliminating or changing more than 300 regulations via the presidential decree, including on rent and labor practices. 

Many of these reforms have been met with resistance due to opposition in Congress. His attempts to pass extensive reforms, including privatizations and labor market deregulations, have been stalled.