What a cruel irony for President Javier Milei that on the very same day the International Monetary Fund (IMF) confirmed conclusion of an agreement including his maximum aspiration of US$20 billion, country risk should be wobbling on either side of four digits due to the global turbulence caused by his adored US counterpart Donald Trump. Not the only setback of a Ruby Tuesday for Argentina’s President because that day also saw Congress vote by a 128-93 margin to create a commission to investigate Milei on his most vulnerable point – his rash decision to promote the boom-and-bust ‘$LIBRA’ cryptocurrency scam last Saint Valentine’s Day – only five days after his misguided bid to inject Ariel Lijo and Manuel García-Mansilla into the Supreme Court came to grief in the Senate.
Whatever the outcome of the volatility stemming from Trump’s tariff onslaught whose logic everybody is still trying to decipher, the commission stands to keep “Cryptogate” alive as a running sore throughout this electoral year, summoning top officials at awkward moments while stopping short of impeaching the President. Meanwhile, the world at large is in an acute age of uncertainty. The more optimistic feel that Trump’s “reciprocal tariffs” (alleging import levies in most of the rest of the world of 40-70 percent which could never have co-existed with previous decades of globalisation) are a negotiating strategy which will end up with some minor adjustments after a lot of gratuitous sound and fury – many countries including the European Union are ready to negotiate but there has been a dangerous tariff escalation with China so far this week. Or is United States protectionism here to stay because of longer-term motives such as the repatriation of industry (for which confidence might be lacking with such abrupt changes of the ground rules along with costlier inputs and denial of immigrant labour) or the creation of a “Fortress America” self-sufficiency in preparation for an intensified level of conflict? But if the United States imports more than other countries because its citizens are richer, what is the problem?
Yet if Tuesday was a bad day at the office for Milei, it at least came on the back of some good news – Buenos Aires Province Governor Axel Kicillof’s Monday announcement that the provincial elections would be advanced to September 7, thus potentially splitting Kirchnerism right down the middle after dominating Greater Buenos Aires for almost all this century. There is nothing new about tensions between Kirchnerism and a more traditional inland Peronism leaning more to the centre-right, despite which the movement’s unity has been largely retained, but Kicillof’s decision strikes at the heart of Kirchnerism by dividing its two leading figures – two-term ex-president Cristina Fernández de Kirchner now chairing the party and the governor of by far the country’s most populous district. A fragmentation across the political spectrum which can only benefit an otherwise struggling Milei.
The key question for the midterm elections is which division will prove more decisive – the guerrilla warfare to the right of centre between the libertarians and PRO or this latest disruption within Kirchnerism? Neither split is irreversible – the libertarians and PRO could still team up if they see it as the only way of defeating Kicillof while some Peronists are having second thoughts about suspending the PASO primaries since the differences between ultra-Kirchnerites and the gubernatorial camp could be resolved by the electorate at that level. But the latter could be a risky strategy for Kicillof because a PASO defeat would derail his 2027 presidential candidacy with Fernández de Kirchner reportedly contemplating a third presidential term and 2023 candidate Sergio Massa a second bid. Yet Kicillof’s entourage implies that this is a battle which must be fought – he needs to be his own man in the 2027 presidential contest rather than another Alberto Fernández permanently under the thumb of his vice-president.
But the battle in Buenos Aires Province is not just between its two protagonists – a sword of Damocles hangs over Fernández de Kirchner’s head since the Supreme Court could at any moment uphold her corruption convictions, which also disqualify her from public office for life, while the government has its “ficha limpia” bill (which likewise has the effect of taking those with confirmed graft convictions out of the political game) hovering around in limbo in Congress.
What was a glorious summer for Milei before the hubris of endorsing the $LIBRA cryptocurrency has now turned into a morass of political confusion and economic volatility both at home and abroad – not that this uncertainty excludes a victorious outcome.
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