By Nicolás Misculin
BUENOS AIRES (Reuters) -Argentina’s libertarian president Javier Milei faces crucial legislative elections on Sunday to determine whether he will be able to continue an economic overhaul of the country that has been backed by the U.S. and encouraged investors.
The poll comes at a vulnerable moment for Milei, who is up against the leftist Peronist opposition that has long dominated Argentine politics. Several corruption scandals, a decline in popularity driven by voters frustrated with sweeping austerity measures and an important loss in a local Buenos Aires election have caused Argentina’s markets to plunge and the peso currency to hit a historic low.
It’s yet to be seen how a recent show of support from U.S. President Donald Trump may affect the vote. Argentina’s central bank recently signed a $20 billion exchange-rate stabilization agreement with the U.S. Treasury Department and a possible $20 billion facility backed by U.S. banks may also be on the way.
Half of Argentina’s lower Chamber of Deputies, or 127 seats, as well as a third of the Senate, or 24 seats, are up for election. The Peronist opposition currently has the largest minority in both houses. Milei’s party has only 37 deputies and six senators.
Most polls showed a tight race between Milei’s La Libertad Avanza and the Peronist coalition, Fuerza Patria. The most consequential races will be in the densely populated province of Buenos Aires, where a high number of seats are up for reelection.
A landslide victory by Milei would not give his party a majority in Congress. But experts say that more than 35% of the vote would be a positive outcome for the government. A substantial increase in his party’s seats could allow him to block efforts by opposition lawmakers to overturn his vetoes, as they have done in recent months.
To achieve this result, Milei must secure the support of millions of Argentines who voted for him as president at the end of 2023 but who, despite a notable drop in inflation, have expressed disappointment with the slower growth of the economy, deep cuts to public spending and the corruption allegations that have shaken the ruling party.
Mariel Fornoni of consulting firm Management & Fit, said Milei must lure voters aligned with the PRO, a center-right party that has formed alliances with Milei in Congress.
“The key is to motivate those who aren’t going to vote and who had previously supported them, particularly those who are disenchanted,” Fornoni said.
Following the election, many analysts predict a devaluation of the peso, which they say has been overvalued to contain inflation. Argentina has since April kept the peso moving in a managed band, which investors say it is likely to widen.
(Reporting by Nicolás Misculin, additional reporting by Horacio Soria, edited by Lucila Sigal and Lincoln Feast.)
Comments