The Latin American Report # 604

Argentine politics has offered plenty of material for analysis in recent days. Everything has revolved around two issues: (1) the crisis of confidence surrounding the macroeconomy—something the government seemed to have well on track at least until midyear; and (2) the scandal that led José Luis Espert, a star candidate of La Libertad Avanza and someone very close to Milei, to withdraw from the legislative race.

The macroeconomic crisis did not appear to stem from technical matters or endogenous market movements, but was instead triggered by the loss of libertarian muscle in Congress and Milei’s resounding defeat in the Buenos Aires provincial legislative elections. Many grew tired of betting on economic austerity; others, of the president’s leadership or communication style; and Congress, of his lack of sensitivity on critical issues like pediatric care.

Washington, aware of how important it is for right-wing forces in the region and beyond to keep Milei in the Pink House, sent a strong message of support—though it came with conditions: Milei must build consensus and forge stable alliances. In short, they’re telling him to grow up, to finally mature once and for all. By the way, the fact that Milei is being (potentially) “rescued” by the U.S. Treasury sends an odd signal, given his anti-government rhetoric.

Thus, Milei went back to knock on former president Mauricio Macri’s door—the same Macri he began to ignore and troll not long after his support proved critical to the triumphant entry into Balcarce 50 of this new generation of conservatives. But while the president was dealing with this economic-electoral firestorm, a corruption scandal erupted around José Luis Espert, a lawmaker frequently seen in Olivos and a close confidant of Milei.

After denying or dodging his connections with a businessman prosecuted for money laundering and drug trafficking, those links came crashing down on him through several reports. The events took place about six years ago, but they say a lot about the lack of moral foundation of those who came to power promising to be different.

Months ago, Milei told journalist Luis Majul that at the slightest hint of corruption, he would immediately eject the person involved. That hasn’t happened with his own sister and presidential secretary, Karina Milei, who has been under the spotlight for the Libra cryptocurrency scandal—and more recently, for leaked audio linking her to a bribery scheme. Yet Milei seems to believe he can handle the situation by acting in rockstar mode. We’ll see.

This is all for today’s report.