The political journey of Javier Milei He had extreme performances last year. The City’s victory in May, when it defeated the PRO, represented the first step in what was envisioned as the hegemonic escalation. September’s electoral catastrophe in Buenos Aires was preceded by a series of bad news that raised fears about the country’s ability to govern. The October general election saw a surprising revival that renewed libertarian pretensions like a tide. On this winding path between euphoria and depression, the government never managed to achieve the most valuable goal of politics: the point of equilibrium. That which enables lasting stability and the consolidation of a crucial aspect. The passing on of trust.
This failure perhaps explains the contradiction between an open-market, fervently capitalist government anchored in its exclusive alliance with Washington and economic behavior that would show other signs. As in 2024, the direct investment index (FDI) remains the worst in two decades, with record capital outflow. The trend correlated with the exit of 23 multinational companies. Local actors took their place.
Such a mutation would represent a structural change in the Argentine production system that cannot be easily explained in a few words. Is foreign capital suspicious of Argentina? Does domestic capital fully trust the libertarian bet? Economist Carlos Melconian tries to explain this: “Foreign companies need a profit margin that the economy and objective political conditions cannot guarantee,” he says. He assures that this dry terrain is more pleasant for the local capital, used to volatility. Back and forth with power in service. A feature of our history.
Perhaps that is why the government celebrated the approval of the budget in the Senate so much. It can be seen in two levels. This is a signal that the markets and Washington (Donald Trump and the IMF) have been demanding for some time. The idea of stabilization to save the situation was implemented twice this year. Milei could boast a first dose of the governability he demanded. He achieved 46 votes, bringing together 26 permanent or occasional allies. Even some Peronists.
From now on it can no longer be said that the first budget in three years of libertarian administration is the product of arbitrariness. However, doubts remain about the way it will be implemented. In particular to compensate for the items that need to be derived following the setback with MPs, university funding and the disability emergency. But there is undoubtedly an institutional framework for the future management of state resources.
In this context it would make sense to draw a contrast. Figures that generally point to reining in spending and maintaining fiscal balance in 2026 include What is striking is the significant increase in positions for the State Intelligence Secretariat (SIDE). These are usually the things that Santiago Caputo, the king of official communication, always pays attention to.
The libertarian government also does not underestimate the importance that budget approval has for the inner universe. It is true that Milei is buoyed by the overwhelming victory in October’s parliamentary elections. But voices are usually an input that, if not watered, quickly withers. Let’s take a look at some figures from the current annual work of the consulting firm Management & Fit. Only 25.4% rate the economic situation as positive. 47% say it negatively. Hope is the argument most frequently mentioned by those surveyed. However, negative feelings outweigh positive ones: 53.8% versus 44%. The personal economic situation is negative for 35.2%, positive for 30.8% and normal for 33.9%.
The libertarian success represented by the approval of the budget can, at best, be attributed to to save this point of balance that is so rare in management. The government has understood that stubbornness is usually a bad advisor. After his defeat in the House, when even many allies voted to support the college and disability bills, he chose not to be seduced by the Senate’s persistence. Although this temptation has crept in.
Milei had an outburst of anger, which was initially expressed by Diego Santilli. The Interior Minister publicly assured (although as a backup I thought otherwise) that the famous Chapter XI, which contained these emergencies, would be reintroduced in the Senate. As always, there was an influence from Karina that caused the withdrawal. Also the arguments that Patricia Bullrich put forward as the new political chairwoman of the Senate.
La Libertad Avanza has fixed a problem that was clearly noticeable until December. He changed the usual dispersion to concentrate forces. The former security minister succeeded in this in this first phase. It is not for nothing that it has passed through three different governments since democratic restoration. Experience, what do you say?
Bullrich insisted on the inconvenience of risking the budget to deal with two emergencies thus triggered. They would suffer the same fate in the Senate as in the Chambers of Deputies. His pragmatism had a different eloquence. He decided to remove the appointment of the three Senate representatives for the Auditor General of the Nation (AGN) from the session. He understood the significance of the scandal caused by the appointment of a Kirchnerist (Juan Forlón) as deputy in the position envisaged by the ruling party’s main ally, the PRO.
He took the same approach to labor reform. At Casa Rosada they dreamed of an end of the year crowned by the budget and this new norm. Aware that a wrong step could be taken, Bullrich preferred to postpone the discussion until February. Nor did he allow himself to be carried away by the victorious enthusiasm of the last meeting: He reiterated that the reform remains the subject of negotiations.
This time the government deployed a larger containment network than it had planned in the Houses of Representatives. Martín and Eduardo “Lule” Menem took part. Santilli examined the governors. He spoke with the Peronist from Catamarca, Raúl Jalil. He negotiated with Ignacio Torres from Chubut about the situation of that province’s pension fund.
Caution reached the extreme: all Libertarian MPs from the Interior were issued plane tickets for Monday to prevent the Senate from passing a budget amendment that would force the new treatment in the lower house. This did not happen because a single controversial article related to education cuts was also adopted, although with fewer votes than the sanction in general. The uncertainty remained until the last moment. He exposed one of the historic libertarian conflicts. When this issue was discussed, Victoria Villarruel left the presidency of the Senate in the hands of José Abdala. Prevents his vote from being necessary for a supposed tiebreaker.
This libertarian work with the household to build trust could potentially encounter obstacles and challenges in other dimensions. Some of these are related to economic development. Others relate to social problems. By accumulating certain details, they act like a call for attention. They reveal an aspect of history that has had serious consequences in the past. Ghosts that would haunt the National Institute of Statistics and Census (INDEC) led by Marco Lavagna. The organization that was a symbol of Kirchnerist manipulation during the unfortunate times of Guillermo Moreno.
The first censorship was activated at the beginning of November. Lavagna had to declare a correction to the Monthly Economic Activity Estimator (EMAE) to prevent the economy from entering a technical recession, according to experts. How did it happen? . The organization released data in September on activity not included in any private consulting firm. At the same time, he retouched data from the past two months. In one of them, in July, the decline turned into minimal growth.
The changes were passed without much fanfare amid libertarian euphoria over victory in the general election. They regained some validity through a new lawsuit. Which was also opened by the Minister of Tourism and Sport, Daniel Scioli, with the INDEC. It stopped funding statistical reports to combine the reality of internal and external tourism. You will do it yourself. According to the organization’s latest work, the influx of international tourists entering the country fell by almost 6% in October. The annual variation of Argentines leaving the country during the same period increased by 10.8%. Travelers spent $597 million. Foreigners left $232 million in the country. The government is particularly concerned about the impact of the deficit in this area. Scioli decided to take cover.
The third aspect of the problem would be the most sensitive. The measurement of inflation. One of the two successes on which the Milei government seems to be based. A year and a half ago, INDEC completed a new system for calibrating price increases and updating the CPI basket. Try to look at the general calculation methodology from a different angle. Where the weight of services has had a much greater impact since subsidies were removed than before. The government has promised that the new procedure will come into force in 2026. The cycle in which the president declared that inflation will be pulverized.
Signs that seem to be going vice versa from the preaching of certainty with which the government surrounded the approval of the budget.
