After triumph in Congress, Milei faces challenge of governing

“We are entering a phase in which results will be demanded of the government.”

The political agreements that gave Javier Milei his first victory in Congress, despite his parliamentary minority, could dissolve in the new stage facing the ultra-liberal president, warn analysts.

Milei, 53, will be pressured to show he can govern an Argentina gripped by economic crisis, they warn.

“Approval of the ‘Ley de Bases’ omnibus bill was important but it’s just a step in a process facing new difficulties in terms of governability,” said pundit Rosendo Fraga.

Against every forecast, bearing in mind the few seats he commands in both chambers of Congress, Milei was able to win approval for his first package of reforms to liberalise the economy, something which he celebrated as “a historic and monumental” milestone.

Achieved after a tortuous legislative process lasting half a year, the reform push suffered a setback in February when the government was forced to sacrifice more than half of the 600 articles contained in the bill’s initial draft.

Milei was close to heading the first democratic government to have no law approved by the midpoint of its first year in office. “This is explained by its incapacity to create a political coalition and organise a ruling party,” pointed out Fraga, who envisions a legislative storm in the Senate, where the centre-left Peronist opposition is stronger.

In the next few weeks the Upper House will have to tackle a bill to amend the pension updating index in favour of beneficiaries and against the fiscal objectives of Milei.

Deputies in the lower house have already approved a bill with the vote of 160 of the 257 legislators in an unprecedented opposition “scrum,” including members usually closer to the government who on June 28 helped Milei to approve his ‘Ley de Bases.’

“This is a central change in terms of parliamentary majorities,” warned Fraga.

Milei himself reacted to the development. “They can vote whatever they like, I’ll veto everything, I couldn’t care less,” he warned some weeks ago in a speech to businessmen, in which he said he was ready to govern “purely with vetoes” against a Congress which he has described as a “nest of rats.”

But then Congress conceded to the President the delegation of extraordinary prerogatives for a year, tax increases, more flexible labour laws, a controversial set of investment incentives over 30 years and approval for advancing in the privatisation of several public companies.

“Faced with insults, we feigned insanity,” was how Unión Cívica Radical caucus chief Rodrigo de Loredo justified their vote in favour.

A limited success

Passage of the ‘Ley de Bases’ “is definitely a success for a government with 10 percent of the seats,” is the opinion of Juan Negri, director of the Political Sciences course at the Universidad Torcuato Di Tella.

But with that objective achieved, “we are entering a phase in which results will be demanded of the government,” he said.

The backdrop is an economic recession with rising unemployment and poverty affecting half the population. Inflation is running at an annual 280 percent and a horizon of income tax, increases introduced in the fiscal package approved by Congress, looms.

The limits on the President’s fragile political alliances seems to be sinking into the patience of the people who continue to give Milei their vote of confidence, according to surveys.

“If the government starts losing popularity, the moderate opposition will start displaying much more resistance,” evaluated Negri.

Gabriel Vommaro, director of the masters programme in Political Sociology at the Universidad Nacional de San Martín, predicted: “The great doubt from now on is whether, now that this stage of granting reforms is over, the political tension might begin.”

Political analyst Carlos Germano, director of the Germano y Asociados consultancy, considered this to be a crossroads. “A line has been drawn and from now on begins a completely different political scenario,” he said.

“Milei will have to be much more a president of the Republic and stop boosting the personality cult which brought him here,” said Germano

“That moderate opposition, in order not to become diluted, will have to make an abrupt change from what they have been doing until now.”