Argentina Heads to Crucial Midterm Elections Amid Economic Turmoil and Political Scandals

On Sunday, Argentina will hold midterm legislative elections that will renew half of the Chamber of Deputies and a third of the Senate. This election is pivotal not only for the political landscape but also for gauging the popularity of President Javier Milei, whose support has dwindled in recent months. The current parliamentary balance is dominated by the opposition, making it highly unlikely that Milei can overturn it. The results of this vote will have implications for the Argentine economy, especially given the uncertainty surrounding U.S. President Donald Trump's threatened suspension of financial support for Argentina's peso. Milei's party, La Libertad Avanza, secured only over 25% of the votes last election cycle, leading to its minority status in parliament. Despite successfully passing a series of reforms in June dubbed the "bases law," Milei's ability to further his agenda has since come to a standstill, as the opposition has proposed laws that directly contradict his policies. For example, the opposition has pushed to allocate funds for public universities, healthcare, and pensions, increasing public spending in direct opposition to Milei’s economic plans. In recent gatherings, Milei has criticized parliament for being obstructive, arguing that changes to its makeup are necessary for legislative progress. His aim is to secure at least one-third of the parliamentary votes to regain veto powers. However, this goal feels less ambitious now than it did several months ago. Milei’s political fortunes have shifted drastically in recent months, with various scandals tarnishing his image. In February, he was embroiled in controversy surrounding a cryptocurrency he had promoted, drawing scrutiny from both Argentine and U.S. authorities. In August, allegations arose involving his sister Karina, who faced accusations of bribery related to health contracts. Moreover, although Milei succeeded in temporarily controlling inflation through a strengthened peso, this has simultaneously stifled economic growth and diminished the purchasing power of ordinary citizens. Cuts to public subsidies have negatively affected the poorest populations, with many state employees facing layoffs. In anticipation of the upcoming elections, recent local elections in Buenos Aires revealed a troubling trend for Milei's party: the Peronist coalition, led by Axel Kicillof, won by a substantial margin—14 points—over Milei’s party in a region where roughly 40% of Argentinians reside. This caused alarm among international investors and negatively impacted the value of the Argentine currency. The situation is compounded by Milei's reliance on U.S. support, as the Trump administration sees him as a key ally in South America, having pushed for the purchase of billions in Argentine currency. However, this reliance raises concerns that U.S. interference may affect election outcomes. The opposition has already labeled Milei as a president beholden to Washington, stirring anti-government sentiment among the populace. Recent revelations adding to the chaos include accusations against José Luis Espert, La Libertad Avanza's primary candidate in Buenos Aires, regarding a $200,000 payment from a man wanted on drug trafficking charges in the U.S. Espert's subsequent withdrawal from the race has left a political vacuum on the ballots. As the elections approach, Milei's administration has seen the resignation of two cabinet members amid ongoing controversies. The political landscape is unfolding as Santiago Caputo, a high-ranking advisor known for his unconventional methods, is expected to gain influence. Despite these challenges, La Libertad Avanza has the potential to become the leading party in Argentina, with anything over 35% seen as a positive outcome. However, if the vote dips below 30%, it could trigger further concerns about Milei’s leadership. The main opposition, the Peronist party, remains strong but fragmented, as it seeks to capitalize on Milei's recent missteps while navigating the political implications of Cristina Kirchner’s legal troubles. In the final hours of the campaign, Kicillof has criticized Milei for failing to implement the significant changes he promised during his campaign, describing his actions as a return to previously failed liberal policies. As voters prepare to cast their ballots, widespread disillusionment and skepticism permeate the electorate, raising questions about the future direction of Argentine politics and governance. Related Sources: • Source 1 • Source 2