US President Donald Trump and Javier Milei (AP)
In late summer, Marcela Pagano — a member of parliament for Argentina’s ruling party La Libertad Avanza (Freedom Advances) for the past two years — dropped a political bombshell. Not long after she and three other lawmakers announced their departure from the party, she took to social media on August 21 to deliver a scathing assessment.Pagano’s ire was directed at President Javier Milei, the far-right disrupter who many of Argentina’s 46 million citizens still see as a savior, a beacon of hope and a messiah all rolled into one.”I was convinced that we could bring about real change, but unfortunately, the project has strayed from its path,” Pagano told DW about her motives. She said the government has ignored the needs of the middle class and disadvantaged groups such as people with disabilities and pensioners. And “in cases of suspected corruption, the suspects were not fired as promised, but have even been protected,” she said indignantly.Pagano did not mince words in her incendiary statement. She said Milei has surrounded himself with opportunists, yes-men and sycophants, while constructive criticism has been being severely punished. Grandparents have to choose between food and medicine, while universities are falling into disrepair and corruption is not being combated. Milei must change course, she insisted, otherwise the country and industry will go to the dogs.On the eve of Sunday’s parliamentary election, in which half of the chamber of deputies and a third of the Senate will be reelected, the 39-year-old has struck a chord. What many economists around the world have been hailing as the “Argentine miracle,” due to the massive drop in inflation (just 2.1% in September 2025 compared to the previous month), is coming at quite a high price.”More than 25,000 small and medium-sized enterprises have had to close or suspend operations due to lack of demand and increased energy and financial costs. The purchasing power of formal wages fell by around 20% in real terms, while informal incomes and minimum pensions lost more than 30% of their value against inflation,” said Pagano. “And sectors such as construction, retail and services have almost completely ground to a halt.”
Shock therapy with severe side effects
Upon his election as president in 2023, Milei vowed to slash state spending with his symbolic chainsaw and address Argentina’s $278 billion (€239 billion) in foreign debs. The libertarian economist has since laid off tens of thousands of civil servants, merged ministries and cut subsidies for life-saving medicine, electricity, water, gas and public transport.This radical austerity policy has resulted in some impressive outcomes in addition to the curbing of hyperinflation: the first budget surplus since 2010, a rapid import boom and record profits for companies exporting mining and energy.But the poorer parts of society have long been aware that these macroeconomic successes are literally worthless to them. The phrase “My month ends on the 20th” has become a catchphrase for many Argentines, as their salaries are simply not enough to cover the remaining 10 days.Experts estimate that every second Argentine has to dip into their savings every month to make ends meet. The reason is an overvalued Argentine peso with prices similar to those in the US and Europe, as well as rising unemployment, frozen salaries and skyrocketing rents due to the liberalization of the housing market.”Many people are working even harder, while others are postponing any unnecessary purchases,” said political analyst Sergio Berensztein. “Those who used to buy the best brand are now settling for the second or third-best. Families are going into debt. We have been in recession for two quarters, which has led to a slump in consumption.”
Trump wants to help Milei
Due to the economic crisis, the far-right head of state recently sought help from one of his best political friends: US President Donald Trump, who has flattered Milei in return by calling him his “favorite president.” Washington wants to put together a financial package in the form of a currency swap worth $20 billion for the country that is once again in crisis.The move is designed to have an influence on the upcoming midterm election, with Trump linking the financial aid to Milei’s success. “I’m with this man because his philosophy is correct,” Trump said ahead of a White House lunch with Milei on October 14. “And if he wins, we’re staying with him. And if he doesn’t win, we’re gone.”It could be a close call: opinion polls have predicted a neck-and-neck race this Sunday between Milei’s La Libertad Avanza and the resurgent Peronists of Fuerza Patria.The opposition party has enormous momentum after its victory in the Buenos Aires provincial election in early September. Fuerza Patria is counting on the fact that the president’s popularity ratings have plummeted to 40% and that the euphoria of young voters, his biggest supporters, has noticeably waned.Many young people have become quite disillusioned with Milei. “The 2023 presidential election was decided by young people. Milei can still count on strong support from them, but not to the same extent,” said Berensztein. “In the country’s interior, he is still perceived as a voice against the system, even though he has never visited many of these provinces,” he added, pointing out that more men than women voted for the president in 2023.
Corruption scandals weigh on Milei’s campaign
Much will also depend on whether Milei, who recently took the stage as a rock star during the election campaign, can shake off the latest corruption scandals.His sister Karina, secretary general of his party, the most powerful person in the government and Milei’s closest confidante, is alleged to have pocketed 3% from government contracts awarded to a pharmaceutical company, a charge she has vehemently denied.The “Karinagate” scandal involving leaked audio recordings was compounded by another scandal surrounding Milei’s party colleague Jose Luis Espert, who has dropped out of the midterm race after admitting he received $200,000 from a businessman indicted in the US for drug trafficking.”In the end, it is not the outcome of this parliamentary election that will be decisive, but rather how the government works with this result. Of course, it is important for Milei to win the election, even by a narrow margin, in order to gain political capital and stop the momentum of the Peronists,” said Berensztein.”But a victory will not solve Argentina’s problems. Milei must learn to build bridges and, above all, to change his confrontational style.” Go to Source