Despite social hardship and corruption scandals surrounding President Javier Milei, Argentines have supported their ultra-liberal president. In the midterm congressional elections, Milei’s party, La Libertad Avanza (Freedom Advances), achieved surprising success. Milei is likely to see this as a mandate to continue his radical reform course.
“Argentinians have chosen not to return to the past. They have voted for a future of prosperity and growth,” Milei said in an interview on A24 television. About his tough austerity program, he said: “The worst is already behind us.”
La Libertad Avanza secured 40.68 percent of the vote in Sunday’s vote, the electoral office announced. The left-wing opposition received just under 31.69 percent. Despite compulsory voting, voter turnout was just 67.9 percent.
Milei wants to continue the reform agenda
After the election victory, Milei was cheered by supporters in Buenos Aires. “Today the construction of the great Argentina begins,” he said. He announced that he would continue his reform agenda and called on provincial governors to cooperate.
The financial markets appreciated the Argentinians’ voting decision. In premarket trading, shares of Argentine companies on the New York Stock Exchange rose by up to 35 percent.
The vote, in which half of the Chamber of Deputies and a third of the Senate were replaced, was also seen as a mood test at the halfway point of Milei’s presidency. With his tough austerity policy, he managed to balance the budget and reduce the inflation rate. But the hoped-for economic upswing has so far failed to materialize.
Milei currently only has a few representatives of his own in the Chamber of Deputies and the Senate. Most recently, he ruled largely through decrees, but his legislative initiatives were repeatedly stopped in Congress. So Milei’s ambitious reform agenda has stalled.
His party has now gained 47 seats in the Chamber of Deputies and will hold 80 seats in the lower house from the constitutive meeting on December 10th. There are also 24 MPs from the allied conservative Pro party. This means that Milei and his partners have at least a third of the mandates – a quorum that he needs to defend his presidential veto against parliamentary decisions. In the Senate, La Libertad Avanza gained twelve additional seats and will now have 18 senators from its own ranks.
US government supports peso with foreign exchange purchases
The good election result should also reassure Milei’s allies in Washington. President Donald Trump’s government recently provided the heavily indebted country with additional liquidity through a currency exchange worth $20 billion. In an unusual step, the Treasury Department in Washington also bought pesos on a large scale to support the exchange rate of Argentina’s national currency.
Trump made his aid to Argentina dependent on Milei’s victory in the midterm elections. “If he loses, we will no longer be generous,” Trump said during a recent visit to Milei’s White House. Now the Argentine has delivered – and Trump was pleased. “Congratulations to President Javier Milei on his landslide victory in Argentina,” he wrote on his Truth Social platform. “He is doing an excellent job! Our trust in him has been confirmed by the Argentine people.”
However, the underlying problems of South America’s second largest economy remain. Despite the initial success of Milei’s reform course, the economy is not really taking off. Many people have lost their jobs and investors are holding back in view of the ongoing uncertain situation. Industrial production has collapsed due to the poor competitiveness of Argentine companies and cheap imports, and the inflation rate is still over 30 percent per year.
Corruption scandals are tarnishing Milei’s image
In addition, several corruption scandals in Milei’s environment are damaging his image as an independent political rebel who wants to be completely different from the establishment in the South American country. Milei himself promoted the cryptocurrency $LIBRA on Platform
His sister and key political advisor, Karina Milei, is accused of demanding bribes on public pharmaceutical orders for the disabled. She denies the allegations. Shortly before the election, Milei’s leading candidate in the province of Buenos Aires, José Luis Espert, also dropped out of the race. It was previously known that Espert had collected $200,000 in consulting fees from an entrepreneur who was wanted in the USA for drug trafficking.
