Voters in Argentina are heading to the polls in midterm legislative elections that will gauge support for President Javier Milei’s sweeping free-market reforms, which have caused austerity pains for many, at a critical juncture in his presidency.
Elections are being held on Sunday for half of Argentina’s lower Chamber of Deputies, or 127 seats, as well as a third of the Senate, or 24 seats. The outcome could determine whether Milei’s libertarian programme of hefty budget cuts and bids to deregulate the country’s struggling economy will endure.
Milei’s La Libertad Avanza party, a relatively new political force in Argentina, has only 37 deputies and six senators, amounting to less than 15 percent of seats in Congress.
The party is aiming to boost that share to at least a third of seats in Congress – to help defend against opposition attempts to thwart the president’s agenda, to shore up investor confidence and, crucially, to retain Milei’s support from fellow right-winger United States President Donald Trump.
“Don’t give up because we’re halfway there,” Milei told supporters at a closing campaign event in the port city of Rosario on Thursday. “We’re on a good path.”
US backing on the line
Earlier this month, Washington pledged a $40bn potential bailout, including a $20bn currency swap to stabilise the value of the peso, and a possible $20bn “facility”.
But Trump has threatened to pull away if his populist ally performs poorly, warning that “if he doesn’t win, we’re not going to waste our time, because you have somebody whose philosophy has no chance of making Argentina great again.”
Trump’s bailout plans have infuriated US farmers struggling amid his trade war with China, and many have questioned his “America First” credentials.
US Senator Chuck Grassley from Iowa recently summed up the concerns: “Why would the USA help bail out Argentina while they take American soybean producers’ biggest market???”
On October 19, a reporter asked Trump why he decided to aid Argentina despite concerns among US soya producers.
“Argentina is fighting for its life,” Trump answered. “Young lady, you don’t know anything about it. … They have no money. They have no anything.”
Currently, both chambers in Argentina are controlled by the left-wing and centrist opposition to Milei’s party, with the Peronist opposition movement currently holding the largest minority in both houses.
War on inflation
Milei, a brash, self-declared “anarcho-capitalist”, came to power in December 2023, promising to revitalise Argentina’s long-ailing economy, wielding a chainsaw as a symbol of his intention to radically cut state spending.
His presidency has seen tens of thousands of public sector jobs disestablished, spending on education, health and pensions slashed, and public works frozen.
The austerity policies have been blamed for pushing millions deeper into poverty, but have slowed monthly inflation – down from 12.8 percent before Milei’s inauguration to 2.1 percent last month – albeit while economic growth and consumption have faltered.
Meanwhile, many of Milei’s signature policies, including bids to privatise state-owned enterprises, have been blocked by Congress.
Adding to his woes, members of Milei’s inner circle have been implicated in scandals, including one tied to his sister, who also serves as his chief of staff.
Approval ratings down
With Milei’s approval numbers down, and following losses for his allies in bellwether provincial elections in Buenos Aires last month, pundits predict his party will struggle to achieve its target of a third of the seats up for grabs.
Mauricio Monge, Latin America economist at Oxford Economics, told AFP that the US bailout was “not enough to counteract the growing likelihood that the election results will prevent further reforms”.
“If history has taught us anything about Argentina, it’s that previous bailouts, when political support wanes, have proven futile,” he said.
