In a pivotal moment for Argentina, President Javier Milei emerged victorious in the midterm elections held on Sunday, securing critical support for his radical free-market agenda. This election is not just a political contest; it is viewed as a significant referendum on Milei's leadership over the past two years. His party, La Libertad Avanza, garnered over 40% of the votes, surpassing the left-leaning Peronist opposition, which managed only 31%. This outcome exceeded analysts' expectations and bolstered Milei's position as a transformative figure in Argentine politics.
Milei's victory translated into tangible gains in the legislature, with his party and allies securing 14 seats in the Senate and 64 in the lower house of Congress. This newfound strength is crucial for Milei, as it enables him to uphold presidential vetoes and block any impeachment attempts. Celebrating at the La Libertad Avanza headquarters in downtown Buenos Aires, a jubilant Milei proclaimed the election results as a mandate for implementing his ambitious spending cuts and tax reforms.
The stakes are high for Argentina, particularly with an anticipated $40 billion in financial backing from the Trump administration. The former U.S. President had suggested that a favorable outcome for Milei in these elections was necessary for finalizing a $20 billion currency swap deal with Argentina's central bank, alongside an additional $20 billion loan from private banks. Trump’s remarks underscored the international importance of the Argentine midterms, with potential repercussions for the country's economic stability.
Following the election results, markets are expected to respond positively, reflecting a renewed confidence in Milei's economic program. Analysts believe that this outcome signifies a sustainable path forward for Argentina, as noted by Marcelo J. García, director for the Americas at the geopolitical risk consultancy Horizon Engage. The fragmentation of the Peronist coalition, historically a dominant force in Argentine politics, has further weakened its position.
The results of the election indicate a significant shift in support for Milei's libertarian party, even in traditional Peronist strongholds. Notably, in the Buenos Aires province, previously a bastion for the Peronists, La Libertad Avanza achieved a narrow victory, defying expectations following a substantial loss just a month prior. This electoral shift reflects a changing sentiment among the electorate, as many Argentines seek alternatives to the status quo.
Despite his electoral gains, experts warn that President Milei faces considerable challenges in implementing his agenda. Political consultant Sergio Berensztein emphasized the necessity for Milei to build alliances to ensure his reforms pass through Congress. The current election results, while significant, do not provide a majority, making coalition-building essential for the success of his proposed economic reforms.
The coming months will test public patience for Milei's austerity measures. Although budget cuts have reduced inflation from a staggering 289% in April 2024 to 32% recently, the rising prices still outpace wages. This has created a polarized electorate, with some benefiting from reforms while others struggle to make ends meet. The disparity is evident in areas like Puerto Madero, where luxury car sales have surged, contrasting sharply with the experiences of less affluent citizens.
At a soup kitchen across the Riachuelo River, 64-year-old Epifanía Contreras expressed her frustration, stating that her pension has diminished in value due to inflation, making it increasingly difficult to survive. The electoral turnout rate of just under 68% reflects a growing public resignation toward the political process, marking one of the lowest participations since Argentina's return to democracy in 1983.
As President Milei prepares to advance his economic agenda, the outcome of the midterm elections serves as both a mandate and a warning. With significant support from international allies and a changing political landscape, the road ahead will require careful navigation of the complex socio-economic realities facing Argentina. Only time will tell how effectively Milei can balance his radical reforms with the needs and expectations of the Argentine people.
