President Javier Milei’s harsh defeat was to be expected. In the days leading up to it, government insiders let slip that they would be content with “losing narrowly.” They worked with wildly different numbers, some optimistic, but deep down they did not buy the sweet talk of friendly pollsters who spoke of a “technical tie” or an open-ended finish that kept La Libertad Avanza alive in the legislative elections in Buenos Aires Province. Others, more effusive still, even predicted victory over Peronism – a scenario the Casa Rosada viewed with some disbelief. Did they see it coming? Did they sense that “the street” did not reflect artificial triumphalism? In the end, reality has delivered a hammer blow: Fuerza Patria leading by a crushing margin.
The first reading is that this is a clear setback, not only for the government and its economic programme, but also for the presidential style that Javier Milei himself tried in vain to soften with a recent promise to stop insulting his opponents – a statement of good intentions that lasted no longer than a breath. The second conclusion is that the ‘black swan’ of Coima-gate, which erupted in the final stretch of the campaign with the leaked audios of ANDIS ex-chief Diego Spagnuolo and a mention of three percent that the President’s sister allegedly collected off the books from pharmaceutical companies with government contracts, left a deep mark. The scandal dominated the agenda in recent weeks, triggered judicial moves, memes and chants at concerts and football matches. It cost Milei dearly. Stubborn as he is, he insisted on clinging to Karina at the closing rally. Bad idea – according to prior polls, the affair was expected to bleed as much as 15 percent of voters who until then had identified as libertarians. That is what happened. Even if those disenchanted voters did not switch to Peronism, they did stop voting for Milei and his candidates.
A third reading concerns how much the government itself, through its savage infighting, contributed to shooting itself in the foot. At the last meeting of the core campaign team – until now formed by Karina Milei, organiser Sebastián Pareja, and star adviser Santiago – there were blistering reproaches from the second to the latter. Pareja accused Caputo of failing to help secure polling station monitors for election day to counter Peronism’s electoral machine. Caputo’s reply only fuelled more anger: why should he take care of that when none of his own faction’s candidates, the digital militants of Las Fuerzas del Cielo, appeared on the lists? Speaking of digital warriors, another flashpoint came in these heated hours when Cabinet Chief Guillermo Francos clashed with Caputo’s troll commander ‘Gordo Dan,’ after the latter posted unspeakable remarks about the disabled daughter of an ally, Luis Juez. More friendly fire.
What this defeat in Buenos Aires province – a prelude to October’s key election – has now triggered is fear of a “Black Monday” in the markets, faced with evidence that Milei’s plan faces fresh obstacles. The anxiety over a jump in the exchange rate and in country risk rate is compounded by uncertainty about how the government might react to this result. Will it ease off? Will it radicalise further? How will the outcome affect the unpredictable psyche of the President? Will there be Cabinet changes or fall guys such as Eduardo ‘Lule’ Menem, Karina’s right-hand man caught up in the bribery scandal? Or will they all stay put?
The other big question is how Milei-ism makes it to October – without the devaluation that the establishment demands to correct the anomaly of the cheap dollar. But if he devalues, will that not immediately push up prices and strip Milei of the only flag he still waves high, holding back inflation?
Everything is up in the air. That’s what happens when a President who quarrels with everyone suffers a hammer blow like tonight’s.
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