Analysis-Argentine leader Milei licking his chops ahead of October elections

The Star

3 hours ago

BUENOS AIRES (Reuters) -Argentina's firebrand right-wing President Javier Milei has largely tamed runaway inflation with a ruthless austerity plan and he aims to solidify power when his party and its allies take on a divided opposition in legislative elections in October.
The trash-tweeting, shaggy-haired economist, who famously handed tech billionaire Elon Musk a chainsaw at an event in Washington earlier this year, has overseen a steady dollar-peso peg but relies on legislative allies in Congress to pass his agenda. Many of the changes he has implemented have been through presidential decrees, like his ideological ally, U.S. President Donald Trump, who called Milei his favorite president.
Voters will choose about half the seats in the lower chamber of Argentina's Congress and a third of the upper Senate on October 26. A big victory would not give Milei a legislative majority, but it would offer him leverage to make deals to sell off government-owned companies, cut social spending, change tax and labor policy and embrace social conservatism.
That plan is in stark contrast to the program of the parties that are the ideological descendants of General Juan Peron, who ruled the country from 1946-1955 and 1973-1974, and his wife Evita. Their governments nationalized industries, unveiled pro-labor policies and rolled out social programs including free health care.
The economic stability spurred by Milei, who took power in late 2023 and quickly slashed spending as part of a shock therapy program to pull the South American country out of a deep crisis, has not translated into across-the-board improvements.
Prices of basic goods like jeans and tennis shoes are reportedly double what they are in other parts of the Americas. Pensioners continue to protest the cost of living, and anger over the relatively poor salaries of healthcare workers at a respected pediatric hospital has turned into a months-long saga. Nearly 40% of Argentines remain in poverty, and many of them reject Milei's policies.
"I'm not a Peronist, but I'll vote for them because I'd vote for anyone before Milei," said Jorge, a 42-year-old "cartonero" who collects cardboard for recycling, an extremely poor living. The man, who declined to give his last name, said one of his four children was treated at the pediatric hospital where staff are protesting.
Posing another threat to Milei's popularity is the possibility that he may in coming months have to further tighten economic policy to meet the terms of a $20 billion International Monetary Fund loan that has boosted Argentina's reputation among investors, whose dollars the country desperately needs.
'RUPTURE IS INEVITABLE'
Up for grabs in the election is the vast province surrounding the capital, Buenos Aires, which is the geographic heart of Peronism and home to 40% of the country's voters. A government source told reporters Milei has vowed to defeat Peronist Governor Axel Kicillof there.
Milei's candidate unexpectedly placed first in a recent Buenos Aires local election, and consulting firm Observatorio Electoral shows Milei's Libertad Avanza party with a slim 37%-36% advantage over the center-left Peronists. Nationally, 42% of voters favor Milei against 23% for the Peronists.
Beating the standard-bearers of Juan Peron's legacy would have seemed impossible a few years ago, but with inflation down to a projected 30% this year, from 118% last year, and Milei credited with cutting corruption, some voters are ready to give the political firebrand more power.
"I'll vote for Milei again because he's achieved a degree of normality in the economy," said Federico Segovia, a 22-year-old university student who blamed the last Peronist president, Alberto Fernandez, for leaving the economy in disastrous shape. A recent survey by the consulting firm Synopsis found that the share of those who viewed Milei positively rose to 43.4% in May from 40.9% in April.
Perhaps the biggest wind in Milei's sails comes from the power struggle that has pitted Kicillof and his one-time mentor, former President Cristina Fernandez de Kirchner.
Kicillof, who served as economy minister in Fernandez de Kirchner's government from 2013 to 2015, is expected to run for president in the 2027 election. "The rupture is inevitable," a Peronist source told Reuters. The two opposition politicians are still debating whether they will join forces for the congressional elections. "If there is no agreement for the legislative elections and Peronism is divided, La Libertad Avanza will win the elections in the province of Buenos Aires," the source said.
Milei, meanwhile, has patched over divisions with his closest ideological neighbor, agreeing to offer a combined list of candidates with the center-right PRO party.
The Peronists make up the largest party in Congress and have dozens of governors and mayors across the country. Observatorio Electoral pollster Julio Burdman, however, thinks that power base won't be enough to stop Milei's forces. "The ruling party has all the conditions" to win the most votes, he said. "I can't imagine any other result."
(Reporting by Nicolas Misculin; Editing by Peter Henderson and Paul Simao)