Once again, Argentina proved that when it comes to politics, expect the unexpected. The government’s candidate, Sergio Massa, didn’t just come out top in Sunday’s election, he came close to winning the Presidency outright.
He will now have to face down libertarian upstart Javier Milei in a November 19 run-off that promises to be a ferocious clash between radically different economic ideologies.
Massa promises to maintain Argentina’s welfare state, including free public education and protections for local industrial companies, while Milei vows to slash spending “chainsaw style” and dollarise the economy to end runaway inflation.
Here are the key election takeaways:
1. Even in a dire economy, Peronism can prevail
Not many politicians would stand a chance in an election after overseeing an inflation rate of almost 140 percent. Yet Massa, who doubles up as economy minister, has used all the tricks in the book to give support to voters who are fearful of losing a cradle of subsidies and social-welfare handouts regardless of Argentina’s unsustainable finances.
Days before the vote, Massa’s campaign posted signs in subway stations and train stops showing the difference in fare prices Argentines would pay under him versus Milei: the present 59 pesos, or six cents, compared to 700 pesos without the subsidies the current Peronist administration gives.
These kind of stunts paid off. Massa gained three million votes on Sunday compared to his coalition’s third-place finish in the August primary. Meanwhile, frontrunner Milei lost votes.
Massa carved a clear path to the Presidency by tapping into the entrenched Peronist network of governors, labour unions and social movements.
“Massa’s results demonstrate that the Peronist political machinery is alive and well and can effectively mobilise voters in key traditional bastions in the north of the country and, crucially, the province of Buenos Aires — even amid apathy,” said Jimena Blanco, head of the Americas research at consulting firm Verisk Maplecroft.
2. There is a limit to voter appetite for Milei’s antics
Until Sunday, Javier Milei’s disruptive message, including trading insults with his rivals from the pro-business Juntos por el Cambio coalition, was seen as his key asset. But Milei ended up almost seven percentage points behind Massa, showing that his break-it-all-down style has hit a wall with voters who don’t completely buy into the radical changes he’s selling.
Milei admitted as much in his post-election speech, when he said he was “willing to do tabula rasa” and unite forces with Juntos — whose candidate placed third — to defeat Peronism. That would require toning down some of his rhetoric and more radical proposals to potentially negotiate a common agenda with the more conservative members of Juntos.
Milei’s lack of government experience will also come under the spotlight as the results signalled Argentines aren’t as willing to embrace the unknown as initially thought.
Martin Rapetti, executive director of Buenos Aires-based consulting firm Equilibra, said that a very important cohort of Juntos voters, as represented by candidate Patricia Bullrich, don’t want Massa to win, but that doesn’t mean that they’ll vote for Milei.
“What should be clear to markets is that Massa offers more governability than Milei, regardless of preference between candidates,” he said.
3. The wings of all-powerful Kirchner have been clipped
Underpinning Massa’s lead is a very strong Peronist showing in Buenos Aires province, the country’s largest electoral district, known as PBA. Governor Axel Kicillof, a Massa ally, retained office with almost 45 percent of the vote, showing once again that controlling PBA goes a long way in influencing national politics in Argentina.
Kicillof’s triumph comes even after a scandal in which his Cabinet chief was pictured vacationing in a yacht in Marbella with a model — a bad look at a time of national economic distress. In the end, the images didn’t seem to hurt Kicillof at all: He won the most-populated province by a large margin.
How will this affect Cristina Fernández de Kirchner, the powerful two-time president and current vice-president, who was seen as masterminding the province’s politics behind the scenes? Despite their tactical alliance, Massa’s ascendancy has sidelined Fernández de Kirchner, who has played a leading role in politics since her husband Néstor was elected president in 2003.
4. The centre-right coalition has imploded
Juntos por el Cambio, the pro-business coalition led by former president, Mauricio Macri, was in pole position to form the next government at the start of the year. Yet internal infighting between moderate and conservative factions together with Milei’s arrival relegated them to third position. That would have been unthinkable just a few months ago.
Bullrich only managed to win in the City of Buenos Aires stronghold despite competitive performances in local elections around the country. In a sign of her campaign problems, she failed to retain the votes her coalition obtained as a whole during the August primary, when her party placed second.
At stake is the entire future of the alliance given Massa and Milei’s attempts to pick off those votes. That brings Juntos closer to a possible rupture despite controlling several local governments and a sizable part of lawmakers.
by Patrick Gillespie & Juan Pablo Spinetto, Bloomberg