Javier Milei wins on chainsaw-slashing reforms

Javier Milei, Argentina’s self styled “anarcho-capitalist” President, defied pessimistic poll predictions on Sunday to win in the midterm elections and save his radical economic reforms.

With almost all the votes counted, Milei’s La Libertad Avanza (LLA) party had won nearly 41 percent of the national vote, while the main left-wing Peronist opposition Fuerza Patria party netted just over 31 percent. 

Up for grabs in the election were 127 of the 257 seats in the lower house of Congress, and 24 out of 72 seats in the upper house Senate. The LLA won 64 lower house seats and 12 in the Senate, enough for Milei to overcome an opposition veto against his most radical measures.

Although the opposition retains ultimate congressional control, the triumph will come as a huge relief to the Trump administration in Washington, which had thrown a controversial $40 billion lifeline to Milei to prop up the falling Argentine peso and rescue Trump’s ideological soulmate. The US President congratulated Milei on Truth Social, writing that Milei was “doing a wonderful job” and that his “Landslide victory” justified his confidence in his Argentine ally.

The chainsaw-wielding Argentine President, who once led a Rolling Stones tribute band, literally sang that he was “king of a lost world” at a victory rally in a Buenos Aires hotel, and vowed that his win would enable him to complete his mission to “make Argentina great again.”

Using Trump’s favorite slogan underlines the debt that Milei owes to the American President, who had threatened to withdraw the aid package to Argentina if Milei lost the elections.

Bond markets had piled pressure on the peso causing a run on the currency and forcing the country to dangerously dip into its dollar reserves after Milei lost local elections last month in Buenos Aires province – where 40 percent of the country’s population live.

Milei’s cost- and job-cutting program has already succeeded in reducing Argentina’s inflation rate from 200 percent in 2023 when he took office, to around 30 percent in September. He had slashed tens of thousands of jobs in the country’s bloated state sector and merged overlapping ministries, but the cost of living remains high for ordinary poorer Argentines. The pain of his program, coupled with corruption allegations against Milei’s powerful sister Karina, had hit the President’s popularity. Investors feared that his reforms would be brought to a juddering halt.

Now markets should feel reassured, especially as Milei has pledged that the most painful part of his program is over, and that the country will now begin to feel its benefits. Milei told supporters at his party HQ that Argentina had turned its back on “a century of decadence” and voted to continue along the path of “freedom, progress and growth.”

Milei will still need the support of smaller conservative and centrist parties to push his reforms through Congress. Former President Mauricio Macri, the leader of the Republican Proposal party (PRO), said Milei could count on his backing.

Another former president, the Peronist chief Cristina Fernandez de Kirchner, appeared on the balcony of the apartment where she is under house arrest over corruption charges and blew kisses at her supporters. However, she stayed silent on her party’s loss in Buenos Aires last month.

Observers await the markets’ verdict on Milei’s triumph when they open on Monday, though most analysts expect the peso to recover sharply and regain much of the ground lost in its recent falls.