Stones fly, cars burn, police use batons. When the controversial reform package “Ley Bases” was passed by the Senate in the government district of Buenos Aires a few days ago, the mood outside changed. Some opponents of the government decided to resort to sheer violence. Argentina’s libertarian President Javier Milei later called them “terrorists”. His left-wing populist opponent Cristina Kirchner, on the other hand, claimed that the police themselves had smuggled “provocateurs” into the crowd. She provided no evidence for this.
The scenes are symptomatic of the hardened fronts in Argentina. Nevertheless, the situation is different from what the left-wing camp predicted when Javier Milei took office last December: after six months at the latest, the people would drive the president out of office because of his tough reform and austerity program, they said at the time.
Things turned out differently: When Javier Milei is received by Olaf Scholz in Berlin on Sunday, the Chancellor will be welcoming the currently most popular president in South America. At least, that is what a representative survey published this week by the renowned opinion research institute “CB Consultora” shows.
According to the study, 55.7 percent of Argentinians support their president’s course. This approval rating, which at first glance seems modest, is nevertheless enough to put him in first place on the crisis-ridden continent. The next democratic head of state is Brazil’s Lula da Silva in third place.
According to the survey, there is one main reason for this success: Milei’s tough reforms, which he announced during the election campaign, are beginning to bear tentative fruit. According to a recent study by the Brazilian central bank, the domestic currency, the real, has lost more value against the US dollar this year than the Argentine peso. Something like this seemed unthinkable before Milei took office.
“In the first six months, the government subordinated all political action to the objectives of reducing inflation and generating a budget surplus – and did so quite successfully,” says Susanne Käss of the Konrad Adenauer Foundation in Buenos Aires, which is close to the CDU. In May, the inflation rate was 4.2 percent (after 25 percent in December), and a budget surplus was generated for five months in a row. “However, this was due to drastic cuts on the expenditure side,” says expert Käss. This includes, for example, the reduction of state subsidies, especially for energy, gas and public transport.
In addition, more than half of the many Argentine ministries were eliminated, transfer payments to the provinces were sharply reduced, and funds for research and development were cut, the sustainability of which was in question.
His foreign policy has also been better received by the population than many expected. His clear turn towards the West, the USA and Europe, as seen in his unconditional support for Ukraine and Israel, would have been unthinkable under the previous Peronist government.
In a survey conducted by the Zuban-Cordoba Institute, 48 percent of Argentines support this path, despite the continent’s traditionally anti-American attitude. No other Latin American country has made such a clear change in its geopolitical orientation in recent years.
But the dominant topic in Argentina is the country’s economic development. The liberal-conservative daily newspaper “La Nacion” with a large circulation commented this week that Milei had produced more good news than he had made feared mistakes: “He has reduced the deficit, curbed inflation, controlled the dollar, increased reserves and kept the social crisis in check.”
In addition, the government has so far stuck to the parliamentary rules and wants to legitimize the reforms democratically. This means longer debates about proposed legislation – and a lot of arguments. The opposition is reacting angrily to its loss of power and is threatening to expel senators from its own ranks who voted for the reform package. The same fate awaits former presidential candidate Daniel Scioli, who decided to work with Milei.
The prominent left-wing priest for the poor, “Paco” Oliveira, publicly burned a campaign picture of Scioli and called him a “traitor”. He threatened to exclude Milei voters from the soup kitchens. For the fanatical-fundamentalist Kirchner wing, which sees itself in the tradition of Peronism, loyalty to one’s own camp currently counts more than the search for solutions to Argentina’s problems.
Because with Milei, some existing problems have also become bigger. The poverty rate, which was already high when he took office, has risen again due to the austerity measures. The middle class in particular is affected by increased energy and transport prices. “The fact that Milei’s image has not diminished among the population shows that there is resilience among people who know that these tough adjustments are necessary,” said Agustin Etchebarne from the liberal think tank Libertad y Progreso in Buenos Aires in an interview with WELT.
However, from the point of view of Argentina expert Käss from the Konrad Adenauer Foundation, Milei’s one-sided focus on the macroeconomics, i.e. the major adjustment screws, is problematic. “The country is in a deep recession,” she says, and the massive price increases due to the reduction of subsidies and exchange rate policy have posed major challenges for many small and medium-sized companies or even led to their closure.
The Argentine Chamber of Construction reports that orders in the construction sector have fallen by more than 37 percent, and more than 100,000 jobs have been cut. There were also job losses in the hotel and restaurant sectors and in the transport sector.
According to the government, the low point triggered by the austerity measures will soon be reached. There is huge hope for large investments, including from abroad. President Milei is aggressively promoting good conditions for the technology industry, and he is also supported by US entrepreneur Elon Musk. The question is “when the government can show concrete results that will also reach the population directly. Parts of the middle class are slipping into poverty,” says expert Käss. Support for Milei is still high. Also because his supporters continue to support his course against widespread corruption and cronyism in addition to his fight against inflation. But patience is running out, says Käss. The protests in front of the Senate provided a first foretaste.
