Last week saw at least two important milestones – the 40th anniversary of the verdict of the historic 1985 Trial of the Juntas on Tuesday, followed on Wednesday by President Javier Milei completing the second of his four years in office along with a drastically different Congress. Not that Milei seems to have paid too much attention to these milestones, least of all the juntas trial anniversary (marked only within the judicial branch) – not even being in the country for the midpoint of his Presidency, having flown across the Atlantic to Norway for María Corina Machado’s Nobel Peace Prize (after missing Donald Trump’s FIFA Peace Prize) without even managing to see the heroine of Venezuelan democratic resistance.
The Milei Presidency at its halfway mark can most charitably be described as a work in progress, not having advanced much beyond its initial goals of fiscal surplus and lower inflation. The La Libertad Avanza leader would never deny that his task is incomplete, arguing that decades of decline (sometimes even stretching to over a century in his rhetoric) cannot be reversed in a couple of years – on the contrary, he is already insisting on a second term to conclude Argentina’s transformation. He also had the perfect alibi in being denied more institutional forms of muscle by controlling less than 20 percent of Congress with a total shutout in provincial governments and city halls, an alibi already receding after his midterm triumph. But having said this, there are many aspects where his vision would fail to modernise Argentina, even if given free rein.
The holes in Milei’s plan are often compounded by being collateral damage from his prime achievement of a fiscal surplus rather than simple oversights. Thus the accumulation of Central Bank reserves continually urged by the International Monetary Fund and most economists as an anti-crisis buffer bringing down country risk by reassuring creditors is resisted as running counter to the risky strategy of upholding the currency by devaluing at half the rate of inflation. Public works have been banished from state spending in order to erase deficit but at the expense of modernising infrastructure – some projects like gas pipelines can offer the short-term profit to attract private investment but most do not. The Milei administration also seems blind to education and science being the keys to the economic matrix of the 21st century even more than the 20th, showing scant interest.
The new Congress lacks potential to address these deficiencies. Not only have the 95 libertarian deputies largely been picked for their knee-jerk adhesion to government initiatives rather than personal merit but their numbers have been swollen by the almost unconditional surrender of the PRO centre-right party, which might otherwise have drawn attention to these gaps. Little more than obstruction can be expected from the 97 deputies of Kirchnerism and the left with no solutions beyond throwing money at the problems. This leaves 65 deputies of whom two-thirds are beholden to provincial interests – the governors behind the 22-seat Provincias Unidas caucus claim to defend the productive sector (while their attitudes remain to be seen if the upcoming tax reform includes cuts in their revenue) and underline the need for infrastructure but provincial governments have a long track record of diverting infrastructural funds to more urgent current expenses. This just leaves the ragbag Unidos caucus, some of whose 22 deputies will be alive to these issues, but probably less than five percent of the new Congress has a perspective beyond seeing the Milei administration as an either/or proposition or blatant self-interest.
The agenda of the extraordinary sessions now underway do not offer any immediate transformation although a 2026 Budget would be progress (especially if it could be approved while retaining balance). The government seems more interested in having any labour reform fast than in its contents in order to show control of Congress to the outside world – capping severance among other tweaks will not prevent informal employment from being a tempting short cut for many. Stiffer punishments in the new Criminal Code will not change trials taking forever in a dysfunctional judicial system. Enshrining balanced budgets does not seem to offer any safeguards against a change of government while the proof will be in the pudding for the controversial “fiscal innocence” bill (asking no questions about dollars entering the country). Decentralising glacier demarcation to the provinces (already facing environmental protests) should make life easier for mining but in a very long term.
Yet no rush to judgement on Milei’s second half with still 727 days left to make history.
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