When U.S. President Donald Trump met with his Argentine counterpart, Javier Milei, at the White House on Tuesday, days after offering Argentina a $20 billion lifeline in currency swaps, he conditioned additional U.S. support on Milei’s party being successful in this month’s midterm elections.
Libertarian Milei’s “shock therapy” economic measures have substantially reduced inflation and achieved fiscal surpluses, pleasing investors and drawing praise from the Trump administration.
But there are signs that Argentines are increasingly tired of the cost of fiscal adjustment: austerity measures, subsidy cuts and shuttered factories.
“If he doesn’t win, we’re out,” Trump told reporters Tuesday.
What is at stake in the midterm vote?
On October 26, half of the Chamber of Deputies – 127 seats – and a third of the Senate – 24 seats – are elected.
The Peronist opposition is currently the main minority in both chambers. Milei’s relatively new party, La Libertad Avanza, only has 37 deputies and six senators.
The most important elections will be held in the densely populated province of Buenos Aires, where a large number of seats are up for re-election.
Political analysts Reuters spoke to said that if Milei’s party wins more than 35% of the vote, this would be seen as a positive sign of growing support, using the 30% Milei achieved in the first round of the 2023 presidential election as a barometer.
If it is close to 40% it would be seen as “a very good choice,” said Marcelo García, director for the Americas of the risk consultancy Horizon Engage.
What is at stake?
A good result would substantially increase the presence of Milei’s party in both chambers, allowing the president to continue his policies to reform the economy.
Milei announced this month its intention to introduce labor reforms to increase the formal workforce and new national tax cuts that it has not yet explained in detail.
“If 2025 indicates that Milei is a shrinking figure, investors will begin to prepare for a more center or center-left option by 2027,” García said.
Investors will be watching, in particular, whether Milei gets enough votes to prevent opposition lawmakers from jeopardizing his agenda by overriding his vetoes. In the past two months, Congress has overturned Milei’s vetoes of bills that increased funding for public universities, pediatric health care and assistance for the disabled.
Milei’s party will need about a third of the votes in both chambers of Congress to thwart future attempts to override vetoes.
To achieve this, you will likely have to form alliances. Milei’s party has almost always allied itself with the PRO, a center-right party led by former president Mauricio Macri.
Whether potential allies will support Milei will depend on how well his party does in the elections, said Lorenzo Sigaut Gravina, an economist at the Argentine think tank Equilibra.
What are the chances that Milei will succeed?
Milei’s approval rating has recently fallen below 40%, the lowest level of his presidency.
In addition to concerns about austerity, he has been affected by corruption accusations linked to those close to him.
A judicial investigation was launched after uncorroborated audio recordings were leaked suggesting that his sister and secretary general of the presidency, Karina Milei, was involved in a bribery scheme. Milei has called the campaign accusations a political smear.
Meanwhile, the main candidate for national representative of Milei’s party in the province of Buenos Aires resigned amid accusations of corruption, but it was too late to remove his name from the electoral ballots.
Despite those headwinds, Facundo Cruz, a political consultant in Buenos Aires, said Milei’s party has a much greater presence at the national level than in the 2023 legislative elections.
“Inevitably it will grow in benches. The question is to how much?” he stated.
