Spain on Sunday said it was recalling its ambassador from Buenos Aires after Argentine President Javier Milei, speaking at a far-right gathering in Madrid, called Spanish Prime Minister Pedro Sanchez's wife "corrupt".
The European Union also stepped into the row, its foreign policy chief Josep Borrell condemning Milei's remarks.
The anti-establishment Argentine was the star speaker at a meeting of global far-right leaders organised by Spain's Vox party called Viva 24, which also featured Italy's Giorgia Meloni and France's Marine Le Pen.
During his speech, Milei referred to Sanchez's wife, Begona Gomez, as a "corrupt woman".
He did not identify Sanchez or his wife by name, but he did allude to a cooling-off period that Spain's Socialist premier took last month to decide whether to resign after a court opened a preliminary probe into his wife for suspected influence peddling and corruption.
Sanchez has dismissed the allegations against Gomez as part of a campaign of political harassment by the right.
"The global elites don't realise how destructive it can be to implement the ideas of socialism... even if you have a corrupt wife, let's say, it gets dirty, and you take five days to think about it," Milei said.
Just hours later, Spanish Foreign Minister Jose Manuel Albares announced that Madrid would recall for consultations its ambassador to Argentina, and demanded a public apology from Milei.
"It is unacceptable that a sitting president visiting Spain should insult Spain and the Spanish prime minister, a fact that breaks with all diplomatic customs," Albares said in a televised address.
The recall of an ambassador for consultations is one of the strongest measures in diplomacy and the final step before the severing of diplomatic relations.
Milei responded to Spain's move by reposting a video of his speech on social media, along with the comment "here are my words at Viva 24 that make you so uncomfortable".
Milei, who began his visit to Spain on Friday, was not scheduled to meet Sanchez or King Felipe VI during his stay, as would be customary during a visit by a foreign leader.
During a speech on his first day in Spain, Milei denounced what he called "satanic" socialism.
"Let us not let the dark, black, satanic, atrocious, horrible carcinogenic side that is socialism prevail over us," he said, in a talk about his books on libertarian ideas.
He picked up the theme again on Sunday during his address to the rally at Madrid's Vistalegre congress centre, which was attended by some 11,000 people according to Vox.
"I will lead by example and show the world that a government with our ideas can succeed. It is up to me to show them how sinister and nefarious socialism is," he said.
The event came ahead of elections to the European Parliament from June 6-9.
Surveys suggest those will result in major gains for Europe's far right, giving it more influence in Brussels.
Milei, a self-declared "anarcho-capitalist" won elections last November vowing to reduce the Argentine deficit to zero.
To that end, he has instituted an austerity programme that has seen the government slash subsidies for transport, fuel and energy.
Le Pen, France's far-right standard-bearer and former presidential candidate, stressed the need for tighter limits on immigration in her speech, a central theme of European far-right parties.
"Entire areas of my country, France, are being submerged by immigration," she said.
In video messages, Hungarian Prime Minister Viktor Orban urged "patriots" to "occupy Brussels", while Meloni, Italy's premier, called for a "mobilisation" to bring about "change in Europe".
Hundreds of people, many holding up signs that read "no fascism!" protested in Madrid's central Plaza de Colon against the gathering.
Among them was 27-year-old Argentinian Marisel Cherasco who criticised Milei's policies because they "benefit a few at the expense of the well-being of the majority".
