Argentine election results give Trump-backed President Javier Milei a strengthened mandate

Argentina’s libertarian President Javier Milei won decisive victories in Sunday’s midterm elections, winning a crucial vote of confidence that strengthens his ability to carry out his radical free-market experiment, with billions of dollars of support from the Trump administration.

In elections widely seen as a referendum on self-described “anarcho-capitalist” Milei’s last two years in office, which included corruption scandals and the elimination of tens of thousands of public jobs, his right-wing party La Libertad Avanza won more than 40% of the vote, compared to 31% for the left-wing populist opposition movement, known as Peronismo, beating projections from the analysts.

Milei, a key ideological President Trump’s allysaid his party and allied blocs won 14 seats in the Senate and 64 in the lower house of Congress on Sunday, three seats short of the majority in Congress.

“I am the king of a lost world,” Milei exulted as his followers applauded in downtown Buenos Aires on Sunday. “Today we have passed the turning point. Today we begin the construction of a great Argentina.”

Trump promised to stay “with him” if Milei won the votes

Rarely has an Argentine legislative election generated so much interest in Washington or on Wall Street.

Trump appeared to condition a $20 billion currency swap deal with Argentina’s central bank, and an additional $20 billion loan from private banks, on a strong performance by Milei in the national midterm elections, threatening to rescind assistance to the cash-strapped country in the event of a Peronist victory.

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

Those comments added to growing pressure on Milei, who has struggled to avoid a currency crisis since the Peronist opposition won a landslide victory in Buenos Aires provincial elections last month. Argentina’s bonds and currency plummeted as markets sensed the public was losing patience with Milei’s reforms and analysts predicted a tight race in the medium term.

To stop the rise in the peso, Milei burned billions of dollars in foreign reserves. Then, in an extraordinary move, the US Treasury came to the rescue, selling dollars to help meet the growing demand for greenbacks and finalizing the international credit line.

In the end, the Peronist alliance performed poorly, underscoring how weak the once-dominant movement of the Milei era has become, largely as a result of internal divisions. Markets were widely expected to rise on Monday.

“For foreign investors, this result is a relief because it shows that the Milei program can be sustainable,” Marcelo J. García, director for the Americas of the geopolitical risk consultancy Horizon Engage, told The News. “It leaves the opposition weakened and fragmented, just as it was when Milei won the presidency in December 2023.”

Trump praises Milei, who calls him “a great friend” of Argentina

The Peronist coalition has struggled to channel growing public anger over Milei’s painful austerity measures into a new political strategy after causing the economic disaster that the political outsider inherited in late 2023.

Trump, during a flight to Japan on Monday, said on his Truth Social network that Milei was “doing a wonderful job.”

“Our trust in him was justified by the people of Argentina,” Trump wrote.

Milei responded to the post by calling the US president “a great friend” of Argentina and thanking him for “trusting the Argentine people.”

Axel Kicillof, governor of Buenos Aires province and the most influential elected official in the Peronist opposition, criticized Trump for his role in helping Milei at the polls.

Kicillof warned that billions of dollars in financial aid from the U.S. Treasury and investment banks would do nothing to help ordinary Argentines pressured by Milei’s subsidy cuts or forced to close their businesses by a shrinking economy.

“I want to make it clear that neither the US government nor JP Morgan are charitable corporations,” he said. “If they come to Argentina it is nothing more than to make profits.”

“The situation is getting worse”

Sunday’s result will test the public’s patience for Milei’s cost-cutting measures in the coming months. Although his budget cuts have reduced inflation (from an annual high of 289% in April 2024 to 32% last month), consumer price increases still outpace wages and pensions.

The electorate appears increasingly polarized between the beneficiaries of Milei’s reforms and those who say they are struggling to make ends meet like never before.

In the financial district of Puerto Madero, luxury car dealers report that sales have increased since Milei lifted restrictions on imports. The streets are packed with bankers praising the president for ending a year-long ban on selling dollars online. Good restaurants serve Argentine oil executives who gush about their efforts to attract foreign investment.

But at a soup kitchen across Argentina’s Riachuelo River, Epifanía Contreras, 64, told the AP that she seemed to be bearing the brunt of federal budget cuts.

“You can’t live on 290,000 pesos a month with current inflation,” he said, describing how his monthly pension, about $200, has lost value as a result of austerity measures. “The situation is getting worse and worse.”

More than 250,000 jobs have been lost since Milei came to power, and around 18,000 businesses have closed, according to an analysis published this month by the Argentine Political Economy Center think tank, as the right-wing administration froze investment in infrastructure, healthcare, education and other social services.

Voting is mandatory for adults in Argentina, but electoral authorities on Sunday reported a participation rate of just under 68%, one of the lowest recorded since the country’s return to democracy in 1983.

“I vote out of obligation, nothing more,” Matías Paredes, 50, a real estate broker whose foreign clientele disappeared with Milei’s strong exchange rate, told the AP. “None of these figures inspire optimism. We simply chose the lesser evil.”