Milei Triumphs In Argentine Midterm Elections Closely Watched By Washington

BUENOS AIRES, Argentina (AP) — Argentina’s libertarians President Javier Milei won decisive victories in key regions midterm elections On Sunday, he clinched a crucial vote of confidence that bolsters his ability to carry out his radical free-market experiment with billions of dollars in backing from the Trump administration.

in the election widely seen as a referendum During Milei’s final two years in office, the newly formed La Libertad Avanza party won more than 40% of the vote, exceeding analysts’ predictions, compared to 31% of the vote for the left-leaning populist opposition movement known as Peronism.

Milei, a key Ideological ally of US President Donald TrumpHe said his party and allied blocs took 14 seats in the Senate and 64 seats in the lower house of Congress on Sunday, boosting the government’s support in the legislature to accept the president’s vetoes and block impeachment efforts.

At La Libertad Avanza headquarters in downtown Buenos Aires late Sunday, a beaming Milei hailed the election sweep as a mandate to continue spending cuts and introduce ambitious tax and labor reforms. The results also automatically position him as a candidate for re-election in 2027.

“The Argentine people decided to put 100 years of collapse behind them,” Milei said, referring to a series of Peronist governments that brought Argentina infamous for inflationary spirals as his supporters cheered. government debt defaults.

“Today we passed the turning point. Today we begin the construction of a great Argentina.”

Perhaps no other Argentine legislative election has generated such interest in Washington and Wall Street.

Trump seemed conditioned A. $20 billion currency swap agreement with the central bank of Argentina 20 billion dollars additional loan from private banks After Milei performed well in the national midterms, he threatened to cancel aid to the cash-strapped country in the event of a Peronist victory.

“If he wins, we stay with him, if he doesn’t win, we leave,” Trump said after welcoming Milei to the White House earlier this month.

These controversial comments added to the increasing pressure on Milei. They tried to prevent a currency crisis since then Peronist opposition wins landslide victory in Buenos Aires state polls last month. Argentina’s bonds and currency fell sharply as markets sensed the public was losing patience with Milei’s reforms and the midterm race would be tight.

To stop the peso’s rise, Milei burned billions of dollars of foreign exchange reserves to support the peso. In an extraordinary move, the US Treasury came to the rescue. Sells dollars to meet growing demand For dollars and to top up the credit limit.

Ultimately, the Peronist alliance fared poorly, underlining how weak the once dominant movement had become under Milei, largely as a result of internal divisions. Markets were expected to recover on Monday.

“For foreign investors, this result is a relief because it shows that the Milei program can be sustainable,” said Marcelo J. García, Americas director at geopolitical risk consultancy Horizon Engage.

“It leaves the opposition weakened and fragmented, just like it did when Milei won the presidency in December 2023,” Garcia added.

While en route to Japan on Monday, Trump shared on Truth Social that Milei “did a great job” after her party exceeded expectations in the midterm elections.

“Our trust in him has been vindicated by the people of Argentina,” Trump wrote.

Milei responded to Trump’s post, calling him a “great friend” of Argentina and thanking him “for trusting the Argentine people.”

The results showed Milei’s young libertarian party gaining support across the country, including some surprising corners that have long been under the influence of Peronism.

In the closely watched province of Buenos Aires, a Peronist stronghold that is home to nearly 40% of the electorate, La Libertad Avanza eked out a razor-thin victory on Sunday. Just last month, the Peronists defeated Milei’s party by a whopping 14 percent.

Axel Kicillof, governor of Buenos Aires province and the most influential elected official of the Peronist opposition, criticized Trump for putting his finger on the scales.

He warned that billions of dollars in financial aid from the US Treasury and investment banks would do no good to ordinary Argentines. Milei squeezed by subsidy cuts or forced to leave work By a shrinking economy.

“I want to make it clear that neither the US government nor JP Morgan are philanthropic societies,” he said. “If they come to Argentina, it is for nothing but profit.”

As Milei’s efforts to deregulate the economy and scrap tariffs won over Argentina’s powerful agricultural sector, La Libertad Avanza also swept away Santa Fe, which dominated soybean production and processing, and Córdoba, another strong agricultural province.

Despite Milei’s new momentum, experts warn the angry president still needs to build political allies to carry out his agenda. Given the limited number of seats that could be won in this election, it was mathematically impossible for Milei to secure a majority in both houses.

“This victory is necessary but not sufficient to maintain control of Congress,” said political consultant Sergio Berensztein. “The government must build a broad and effective coalition with like-minded forces.”

Seeking to quickly capitalize on Sunday’s results, Milei said he was urging the country’s powerful state governors to accelerate long-term economic reform agreements.

Sunday’s result will also test the public’s patience with Milei’s cost-cutting measures in the coming months. Despite Milei’s budget cuts significantly reduced inflation Price increases, from an annual high of 289% in April 2024 to 32% last month, still outpace wages and pensions.

Voters appear increasingly polarized between those who benefited from Milei’s reforms and those who say they are struggling to make ends meet like never before.

Luxury car dealers in Puerto Madero’s financial district reported increased sales since Milei lifted import restrictions. The streets are full of bankers Praise the president for lifting a years-long ban on selling dollars online. Fine-dining restaurants cater to Argentinian oil executives gushing over their own businesses. efforts to attract foreign investment.

But Epifanía Contreras, 64, who works at a soup kitchen on the other side of the Riachuelo River in Argentina, said she felt like she was bearing the brunt of the cuts.

“With today’s inflation, you cannot live on 290,000 pesos a month,” he said and explained how this happened. monthly pension of $200 Milei has decreased in value since reducing cost of living increases. “The situation is getting worse”

Election officials reported a turnout rate of just under 68% on Sunday, reflecting widespread public resignation; this is among the lowest rates recorded since the country’s return to democracy in 1983. Voting is compulsory in Argentina.

“I’m voting out of necessity, nothing else,” said Matías Paredes, a 50-year-old real estate broker whose foreign clients have vanished due to the Milei’s strong exchange rate. “None of these numbers inspire optimism. We’re just choosing the lesser evil.”

Associated Press writers Almudena Calatrava and Débora Rey contributed to this report.