Embattled Milei faces critical midterm elections in Argentina

Voters in Argentina are heading to the polls for midterm legislative elections that will gauge support for President Javier Milei’s sweeping free-market reforms that have caused austerity for many. Critical turning point in the Presidency.

In Argentina, elections are held on Sunday for half of the lower house of the House of Representatives (127 seats) and one-third of the Senate (24 seats). The outcome could determine whether Milei’s libertarian program of massive budget cuts and proposals to deregulate the country’s struggling economy will stick.

Milei’s La Libertad Avanza party, a relatively new political force in Argentina, has only 37 MPs and six senators; This amounts to less than 15 percent of the seats in Congress.

The party aims to increase that share to at least a third of the seats in Congress to help defend against opposition attempts to block the president’s agenda, boost investor confidence and, most importantly, preserve the support Milei enjoys from right-wing US 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 are on a good path”

USA even supports

Earlier this month, Washington promised a potential $40 billion rescue package, including $20 billion in currency swaps, to stabilize the value of the peso. Possible $20 billion “facility”.

But Trump’s threatened to withdraw He warns that if his populist ally performs poorly, “if he doesn’t win, we won’t waste our time, because you have someone whose philosophy has no chance of making Argentina great again.”

Trump’s rescue plan It infuriated US farmers It is struggling amid a trade war with China, and many question its “America First” credentials.

U.S. Sen. Chuck Grassley of Iowa recently summed up the concerns: “Why should the U.S. help bail out Argentina when it’s taking away the largest market for American soybean producers???”

On October 19, a reporter asked Trump why he decided to help Argentina despite the concerns of U.S. soybean producers.

Trump responded, “Argentina is fighting for her life.” “Young lady, you don’t know anything about this… They have no money. They have nothing.”

Currently, both chambers in Argentina are controlled by the left and centrist opposition to Milei’s party, with the Peronist opposition movement currently holding the largest minorities in both chambers.

War against inflation

The brash Milei, a self-proclaimed “anarcho-capitalist”, came to power in December 2023 and promised to revive Argentina’s long-ailing economy, using a chainsaw as a symbol of his intention to radically reduce state spending.

His presidency has seen tens of thousands of public sector jobs eliminated, education, health and pension spending cut and public jobs frozen.

Austerity policies have been blamed for pushing millions further into poverty, but have slowed monthly inflation (from 12.8 percent before Milei’s inauguration to 2.1 percent last month), even as economic growth and consumption have weakened.

Meanwhile, many of Milei’s signature policies, including proposals to privatize state-owned enterprises, have been blocked by Congress.

To add to their troubles, members of Milei’s inner circle were involved in scandals, including scandals linked to her sister, who also served as private secretary.

Approval ratings dropped

After Milei’s approval numbers plummeted and his allies lost in major provincial elections in Buenos Aires last month, experts predict his party will struggle to achieve its goal of capturing a third of the seats.

Mauricio Monge, a Latin America economist at Oxford Economics, told AFP that the US rescue package “is not enough to offset the growing possibility that the election results will prevent further reform.”

“If history has taught us anything about Argentina, it is that previous rescue operations were futile as political support waned,” he said.