President Javier Milei’s administration appeared to take a breather after the surprise victory in October’s midterm elections, when even the President had to get in the trenches to defend the line. The magnitude of the win, together with the apparent infinite financial backstop provided by US President Donald Trump, allowed Milei to step into the background – a tactical retreat of sorts that allowed the self-proclaimed anarcho-capitalist libertarian to recover while observing from afar. Indeed, the irruption of the corruption scandal involving the President of the Argentine Football Association (AFA), Claudio ‘Tiny’ Tapia and his treasurer Pablo Toviggino, came at the perfect moment to absorb the public’s attention as some other high-voltage cases affecting the government were picking up steam. Football, politics and judicial haste are all traversed by the same forces.
But things have begun to move and the contours of the new structures of power are beginning to reveal themselves. These are by no means well defined and rigid, rather they are liquid, opaque and in constant flux. They respond to specific interests, both domestic and international, and are always extremely transactional, politically and monetarily. The newly updated Chamber of Deputies made its debut in passing a Budget bill for the first time in three years, potentially giving President Milei his first “bill of bills.” Not that the libertarians cared much about governing without a budget given the benefits to their “chainsaw austerity” and financial arbitrariness. But the International Monetary Fund – one of the main vectors of power in today’s Argentina – explicitly requested it of Economy Minister Luis ‘Toto’ Caputo. That, together with the trifecta of reforms (tax, labour and pensions), via a broadening of the governing coalition.
With the newly minted libertarian Diego Santilli in charge of negotiations at the Interior Ministry, the government managed a first lower house victory with the approval and counted with the affirmative vote of 132 deputies. These included La Libertad Avanza’s own legislative muscle, together with PRO, UCR Radicals and provincial forces. The centrist Provincias Unidas coalition of governors expressed their partial support by allowing quorum, but abstained from voting (17 votes), while Peronists under the Unión por la Patria tag opposed with 97 votes. While not an ample majority, it’s enough to begin pushing bills through Congress, as opposed to ruling by emergency decree, giving greater robustness to Milei’s policy plan. Yet there was a plot twist and in individual article voting the Casa Rosada was deprived of its attempt to block emergency financing for the disabled and funds for state universities, two of the most contentious political issues of 2025. This pushed the Budget into deficit territory, the original sin according to Milei, forcing his administration to consider vetoing its own project, banking on Patricia Bullrich to save it in the Senate, something that ultimately didn't happen.
Freshly relieved of her duties at the Security Ministry, Bullrich has become the Casa Rosada’s lead musketeer in the Senate. In part this responds to a silent civil war between the President and his second in command, Vice-President Victoria Villaruel. But also to Bullrich’s own style and centrality, having demonstrated that she will go to any lengths to defend her leader’s interests. “The kid,” (a rough translation of Bullrich’s nickname, “la piba,” earned during her days as a member of the Peronist Youth and ultimately the paramilitary guerrilla group, Montoneros) faced an uphill battle: she needed to modify the Budget bill to include the exclusion of funds for the disabled and public universities in record time, in order to send the project back to the Chamber of Deputies to get it approved before new year’s. Thirty-seven votes are needed for quorum while a simple majority will face Peronism’s 28 votes from a caucus led by José Mayans that responds politically to Cristina Fernández de Kirchner. The Casa Rosada has been chipping away at them, managing to slip loose five votes since the election. “The kid” will have to seduce PRO, the UCR and provincial forces who have already given them a piecemeal victory in the other chamber, proving they won’t concede too easily to their wishes.
Bullrich knows it’s a marathon and not a sprint, despite the urgency in the Casa Rosada. In charge of the Labour Commission, she has already said she expects the reform bill to be ready by the end of 2026. The other two should occur in the interim. Getting the trifecta on the books is essential to maintain the trust of IMF Managing Director Kristalina Georgeiva, but also to prove to US Treasury Secretary Scott Bessent that Argentina is doing its homework. While the financial backstop remains in place, Trump and Bessent want Milei to progressively grow up and pay their own bills, which implies access to international credit markets. Milei and Caputo need to convince the market that Argentina will no longer act like a rebellious teenager and that means political pragmatism, but also currency market openness and reserve accumulation. Caputo’s announcements this week go in that direction, indicating that he is complying with his part of the bargain in order to guarantee debt servicing support, be it from the market or his sugar daddies in Washington DC.
The political sphere remains deeply fragmented, though. While Milei’s libertarians have grown in owned legislative muscle, they still need help from circumstantial allies and provincial governors to pass legislation. They also have open negotiations with Peronist sectors that occasionally come to light, such as the late-night appointment of officials to the National Audit Office (AGN), a turn of events denounced by both PRO and the left. With Santilli in the Interior Ministry they’ve buffed up on political negotiation, which ultimately means funding and posts. In the Senate, they’ve debilitated the Peronists and now count with the vigour of Bullrich to counteract the conflict with Villaruel. Yet there are few guarantees if any at all, particularly given the strongly politicised bent of the President who has purposefully called himself to silence, but could explode at any minute. Especially if under threat, and particularly if the crosshairs are aimed at the Presidential Chief-of-Staff, Sister Karina.
Despite the President’s popularity, the libertarian administration has seen its armour pierced by the revealing of salacious corruption scandals, from the ‘$LIBRA’ crypto-fraud to the ANDIS national disability agency, both of which hit Karina front and centre. They’ve managed to partially recover, winning the national midterms and bringing down the incidence of corruption as the main issue perceived by society. According to the latest figures put together by pollsters AtlasIntel, corruption remains the main preoccupation of those polled at 45 percent, down from 53 percent in September when the controversial recording of Diego Spagnuolo, Milei’s personal lawyer and former head of ANDIS, were leaked and revealed the extent of corruption in purchases of medication for the disabled. It had previously reached those levels in early 2025 during the heyday of $LIBRA, which feels like it happened years ago. Unemployment is growing as a concern (37 percent), as is inflation (30 percent) and the general economic situation (26 percent). Milei remains the most popular politician in the country with a 43 percent approval rate, but sustains a 10 percentage point negative differential. And government approval remains deeply polarised, with 47.7 percent noting it is horrible, 16.5 percent considering it regular, and 35.2 percent saying it is excellent (together, 51.7 percent).
Together, all of these circumstances indicate Argentina is nowhere near out of the woods yet. Without an economic rebound that eventually morphs into actual growth, popular support will remain deeply polarised and legislation will have a hard time getting through. Milei won himself a second chance after winning the national midterms. The ball is in his court.
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