Milei Triumphs In Argentine Midterm Elections Closely Watched By Washington

BUENOS AIRES, Argentina (AP) — Argentina’s libertarian President Javier Milei won decisive victories in key districts in midterm elections Sunday, clinching a crucial vote of confidence that strengthens his ability to carry out his radical free-market experiment with billions of dollars in backing from the Trump administration.

Milei’s governing La Libertad Avanza party won over 40% of votes in national elections to renew almost half of the lower house of Congress, according to tallies in local media using numbers from electoral authorities with more than 97% of votes counted.

La Libertad Avanza also swept six of the eight provinces in the vote to renew a third of the Senate. The figures exceeded analysts’ projections for Sunday’s vote.

In comparison, the results showed the left-leaning populist opposition movement, known as Peronism, winning over 31% of the vote — what analysts described as the alliance’s poorest performance in years.

Milei said his party went from holding just 37 seats in the lower house of Congress to 101 after Sunday’s vote. In the Senate, he said La Libertad Avanza picked up 14 more seats to end up with 20 senators. The strong showing ensures Milei will have enough support in Congress to uphold presidential vetoes, prevent an impeachment effort and see through his ambitious plans for tax and labor reforms in the coming months.

At his party headquarters in downtown Buenos Aires, Milei burst onstage and sang a few lines of the death-metal tune that has become his anthem in a raspy baritone: “I am the king of a lost world!”

Beaming as his supporters cheered, he seized on the results as evidence of that Argentina had turned the page on decades of Peronism that brought the country infamy for repeatedly defaulting on its sovereign debt.

“The Argentine people left decadence behind and opted for progress,” Milei said, thanking “all those who supported the ideas of freedom to make Argentina great again.”

Perhaps never has an Argentine legislative election generated so much interest in Washington and Wall Street, particularly after U.S. President Donald Trump indicated that he could rescind $20 billion in financial assistance to his close ally in cash-strapped Argentina if Milei lost Sunday’s vote.

But the buzz around the election abroad wasn’t felt in Argentina. Even though voting is compulsory, electoral authorities reported a turnout rate of just under 68% Sunday, among the lowest recorded since the nation’s 1983 return to democracy.

Milei, a key ideological ally of Trump who has slashed state spending and liberalized Argentina’s economy after decades of budget deficits and protectionism, had a lot riding on Sunday’s elections.

Milei’s government has been scrambling to avert a currency crisis ever since a major defeat by the Peronist opposition in a provincial election last month panicked markets and prompted a selloff in the peso that led to the U.S. Treasury’s extraordinary intervention.

A series of scandals — including bribery allegations against Milei’s powerful sister, Karina Milei — hurt the president’s image as an anti-corruption crusader and hit a nerve among voters reeling from his harsh austerity measures.

Although the budget cuts have significantly driven down inflation, from an annual high of 289% in April 2024 to just 32% last month, many Argentines are still struggling to make ends meet.

Price rises have outpaced salaries and pensions since Milei cut cost-of-living increases. Households pay more for electricity and public transport since Milei cut subsidies. The unemployment rate is now higher than when the libertarian president took office.

Associated Press writers Almudena Calatrava and Débora Rey contributed to this report.

Commenting on the midterm elections, U.S. President Donald Trump threatened to rescind a $20 billion aid package for Argentina if Milei suffers a defeat at the hands of a “socialist or communist.”

Trump was apparently referring to Argentina’s loosely populist movement known as Peronism that helped deliver the economic shambles that Milei inherited in late 2023.

Reckless public spending under a succession of Peronist governments — including that of former President Cristina Fernández de Kirchner, now serving house arrest for corruption — brought Argentina infamy for its inflationary spirals and sovereign debt defaults.

“We needed a major change,” said Díaz, who, before launching her yacht business, lost her job as a top executive when Chilean retail group Falabella shut down its Argentine operations over high inflation, import restrictions and a wildly oscillating exchange rate under the previous Peronist government. “I voted for Milei’s government and was really enthusiastic at first.”

Markets shudder at the thought of a Peronist return.

When the Peronist coalition beat Milei’s libertarian party by a landslide in last month’s Buenos Aires provincial elections, investors panicked that the president’s free-market overhaul was losing support and rushed to pull capital out of the country.

In an extremely rare move, the U.S. Treasury came to the rescue — selling dollars to help meet soaring demand for greenbacks, signing a $20 billion credit line and promising another $20 billion in aid from private banks, rather than U.S. taxpayers. Assets jumped on each of the Trump administration’s announcements.

Having dodged a currency crisis, Milei and his supporters were, briefly, ebullient.

“I’m proud of the U.S. support. It helps us grow stronger,” said Luciano Naredo, 28, a high-end car salesperson in Puerto Madero. “I think Argentina is finally taking its rightful place in the world.”

But Trump’s warning that the U.S. could pull assistance unnerved markets. Investors are hedging against more turbulence.

Although Isla Maciel has long been a Peronist stronghold, 42% of the wider Avellaneda municipality voted for Milei as president in 2023, betting on the wild-haired political outsider to stabilize the economy and end triple-digit inflation.

Wielding a diesel-fume-spewing chainsaw at rallies, Milei cut tens of thousands of government jobs, slashed state spending and burned through foreign exchange reserves to shore up a chronically depreciating peso.

Inflation dropped — in fulfillment of Milei’s flagship campaign promise.

But almost two years into his economic overhaul, purchasing power has dropped, too. With inflation still hovering at 32% annually, residents of Isla Maciel have watched the value of their wages and pensions shrivel.

“You can’t live on 290,000 pesos a month with today’s inflation,” Epifanía Contreras, 64, said as she packed her plastic bowl with rice and peas at the Foundation of Isla Maciel soup kitchen, referring to her $200 monthly pension. “The situation is getting worse and worse. It’s not fair.”

Volunteers serving sopa paraguaya, a custardy cornbread, to a stream of regulars on Friday said demand has more than doubled in the past year. Those who once picked up occasional meals when tight on cash now turn up hungry.

“People are coming out of real need,” said Maria Gomez, a volunteer cook. ”It’s chaos.”

A third fewer residents of the Avellaneda municipality supported Milei’s libertarian party in last month’s provincial election than in 2023, expressing nostalgia for the redistributive policies of the opposition Peronist party despite its more recent reputation for financial ruin.

Axel Kicillof, governor of Buenos Aires province and the most influential elected official in the Peronist opposition, said Argentina faced a “critical election in the midst of a complex economic climate” as he cast his ballot in the city of La Plata.

“Where is this resolved, or where does it begin to be resolved?” he asked of the nation’s economic troubles. “At the ballot box.”

Milei has vowed in campaign speeches to press on with his harsh austerity program. But his chain saw prop, once a rally staple, hasn’t been trotted out in months.

Voting on Sunday in Buenos Aires’ middle-class Almagro district with his sister under heavy security, Milei shook hands with supporters who shouted, “Go president!” and left without making statements to the press.

Most polls predicted a tight race between Milei’s La Libertad Avanza (Liberty Advances) party and the Peronist Fuerza Patria coalition. Half of Argentina’s lower house, or 127 seats, and a third of the Senate, or 24 seats, are up for grabs.

Currently controlling less than 15% of Congress, Milei’s government hopes to win enough seats to defend its austerity measures, uphold presidential vetoes and impose labor and tax reforms.

The stakes are high. A defeat for Milei could pile more pressure on the peso and force a painful devaluation of the currency’s controlled exchange rate, raising inflation and undermining the president’s main achievement.

Weary Argentines are bracing for impact.

“Each new government comes in, criticizes the last one, promises to do things differently and ends up being the same or worse,” said Matías Paredes, 50, a real estate broker whose foreign clientele vanished with Milei’s strong exchange rate. “This country moves in cycles.”