Javier Milei and his ‘chainsaw’ austerity won big

Argentina’s President Javier Meille has delivered a landslide victory for his party in Sunday’s midterm elections after defining the first two years of his presidency with radical spending cuts and free-market reforms.

His party, La Libertad Avanza, won nearly 41% of the vote, taking 13 of the 24 Senate seats and 64 of the 127 lower house seats.

Its gains would make it much easier for the president to push forward with a program to cut state spending and deregulate the economy.

Miley’s ally Donald Trump before the vote Explained Miei will depend on political momentum for the recently announced US $40bn lifeline for Argentina.

Miley’s supporters welcomed him, even as critics accused Donald Trump of foreign interference in Argentina’s election.

In a nod to his North American friend, Miley told cheering supporters: “We must unite on the path of reform that has begun to turn Argentina’s history once and for all … to make Argentina great again.”

Before these elections, his party had only seven seats in the Senate and 37 seats in the lower house.

This meant that his program of spending cuts and reforms faced various political obstacles.

Opposition lawmakers overturned his vetoes of bills to increase funding for state universities, people with disabilities and children’s health care.

After Sunday’s verdict, hundreds of his supporters gathered in jubilation outside a hotel in Buenos Aires where they were watching the result.

“Milei’s party did not have 15% of Congress. Now, with many deputies and senators, he will be able to change the country in one year,” said Dionisio, a young voter.

“Our province was destroyed by previous governments,” said Ezequiel, another voter.

“Now, thank God, freedom has been won. We want our daughter to grow up in this beautiful country. What has happened in the past few years is regrettable.”

The elections were the first national test of President Miley’s popularity since he took office in 2023, promising to cut state spending with a metaphorical “chainsaw.” He made a real brandish at campaign rallies.

He has since slashed budgets for education, pensions, health, infrastructure and subsidies, and laid off thousands of public sector workers.

Supporters including Trump hailed him for reining in inflation — which reached triple digits annually before he took office — reducing the deficit and restoring investor confidence.

His critics, however, argue that the reasons are job losses, decline in manufacturing, collapse of public services, decline in people’s purchasing power and an imminent recession.

Juliana, who works with disabled children in Tucuman province, worries that legislation to increase funding for people with disabilities — which Mayale vetoed before being overturned — could be “at risk” as the president’s position in Congress strengthens.

“Our salary is low, it’s the same, while other things are increasing. We still don’t see a change,” she added.

Veronica, a retired police officer, has been hit by Miley’s pension cuts.

“You see a lot of poverty,” she said. “It’s very difficult: for retirees, for disabled children, for young people. There is a lot of unemployment. Many factories have closed.”

Miei has kept inflation low by boosting the peso, leaving it overvalued and reducing reserves ahead of a $20bn debt repayment next year.

This led to fears that Argentina was headed for a financial crisis.

With poor election results in Buenos Aires province in September, financial markets were shocked that Maylei’s spending-cutting agenda may not be politically sustainable.

These factors prompted the US to step in to help. It has now offered Argentina a potential lifeline of $40bn by arranging currency swaps, buying pesos and private investment.

“If he wins, we’ll stay with him. If he doesn’t, we’ll leave,” Trump had threatened.

Prior to this election, Mayale’s political future had been in doubt as some voters grew weary of his austerity program, as well as the corruption scandals that have rocked his party.

Voter turnout in this election was 67.9%, the lowest in a national election in decades, representing widespread apathy towards politicians of all stripes.

Some voters reluctantly supported him.

“Milei has two years left and he has to try to do everything he can,” said Dardo, a business owner in Buenos Aires. “I think we’re on the right track, but the middle and working classes are suffering a lot.”

He doubts the support from the US will help, saying “we will have to pay for it at some point”.

Others, such as political science student Thiago, said they understood the need for fiscal balance but questioned Miley’s means.

“There is a lack of investment in hospitals, infrastructure, people with disabilities,” he said. “There is a definite false hope.”

The election results show that many Argentines are unwilling to return to the Peronist model Miley has blamed for decades of economic mismanagement.

“Argentinians have shown that they do not want to return to a failed model, a model of inflation … a model of a useless state,” he declared.

Financial markets are expected to rally after the victory: a sign that, for now, Miley’s political presence has kept her economic experiment alive – and America’s support remains.

His new mandate gives him the power to implement more radical changes before the next presidential election in 2027, when his name could once again be on the ballot.

The question now is whether the general electorate is starting to feel better, or if the pain of some of his cuts has once again tested people’s patience.

For now, it seems that a significant proportion of the electorate is – once again – ready to give it time.