Javier Milei’s La Libertad Avanza coalition delivered a surprisingly strong performance in Sunday’s midterm elections, winning both the national vote and even Buenos Aires Province—a result few predicted given the disastrous situation facing the administration in recent weeks. Yet despite this electoral vindication, the fundamental challenge remains unchanged: whether Milei will seize this opportunity to build a sustainable plan for the remaining two years of his presidency, or whether he’ll squander this political capital and find himself mired in an economic and political crisis of uncontrollable magnitude.
Interestingly, it all seems to depend on the decisions he takes moving forward, regardless of yesterday’s electoral result. This is remarkable because the situation facing the Milei administration as it arrived at the election was disastrous, in great part due to regular self-inflicted wounds. Despite the amateurism with which Milei and his ragtag crew of libertarians have governed over the past two years, which included a succession of micro-crises on the economic front, the conditions are now in place for the self-proclaimed “anarcho-capitalist” to lead Argentina toward a more prosperous future. The real liability isn’t Cristina Fernández de Kirchner and the potential return of Kirchnerism—it’s Milei himself.
The Road to an Unlikely Victory
Milei arrived at this transcendental election in the worst possible shape. The electoral beatdown suffered in September’s local elections in Buenos Aires Province precipitated a loss of confidence that sparked a dangerous run on the peso. Indeed, the government’s electoral strategists had suggested a victory in the historic Peronist bastion known as the “mother of all battles” was not only possible but probable. While it seemed extremely unlikely, they ended up being right.
Presidential chief-of-staff Karina Milei empowered her political lieutenants—advisor Eduardo “Lule” Menem and his cousin, Lower House Speaker Martín Menem, together with Sebastián Pareja—to determine this year’s political strategy. It resulted in a series of tough defeats, with the exception of Buenos Aires City, ultimately exacerbated by the loss in Buenos Aires Province, which handed Governor Axel Kicillof an easy, and perhaps unexpected, win.
Peronism almost entered that election fractured, torn apart by civil war between Kicillof and the Kirchners—Cristina and son Máximo. That would have been fatal for them, but even in the context of a weak truce, local mayors and municipal leaders were excluded from national candidate lists, incentivizing them to play all their cards in the local election. Yesterday’s national election operated under different dynamics, with Peronismo hemorrhaging votes in Buenos Aires Province which were capitalized by Milei’s LLA.
Internal Power Shifts
The Buenos Aires Province election also marked a turning point within government ranks, with diluted and controversial political strategist Santiago Caputo leveraging his internal opponents’ defeat to come out on top. The narrative “Caputito” and his crew threaded into public discourse was that his exclusion from the inner circle of campaign strategy led to the defeat and that his return would give the administration breathing room.
This same logic drove several high-profile Cabinet changes, including the exits of former Foreign Minister Gerardo Werthein and Justice Minister Mariano Cúneo Libarona. While the Milei administration has appeared amateurish from day one, the level of internal treachery and ineptitude had overtaken the economy as the main occupation of the Cabinet and several top officials. Yet in its first year in power, La Libertad Avanza managed to weave circumstantial alliances that allowed them to pass legislation—a capability completely relinquished since this year began. At least until the election.
Economic Implosion and the Trump Bailout
The economy began to implode in this context of political dysfunction. Milei and Economy Minister Luis “Toto” Caputo entered the electoral season armed with the dual victories of a balanced budget and consistent disinflation. They also relied on an overvalued peso to spark a “wealth effect” or “plan platita” as it’s called domestically, resulting in a totally imbalanced macroeconomy.
With deeply negative reserves in the Central Bank’s coffers, Milei, Luis Caputo, and BCRA Governor Santiago Bausili devoured any and all sources of dollar-denominated financing until supply effectively dried up. This is when Milei’s courting of US President Donald Trump proved hugely beneficial, allowing the Argentine government to receive an emergency bailout from the United States that included unprecedented direct intervention in Argentina’s foreign exchange markets. This became Milei and Caputo’s secret weapon, giving them the full backstop of the US Treasury and Federal Reserve to execute a consistent macroeconomic plan without the constant risk of sudden devaluation.
The Path Forward: Two Anchors
If Milei and Caputo have US Treasury Secretary Scott Bessent’s full support as the new “anchor” of their economic program (which they need to restructure), the political wing of the government, supposedly under younger Caputo’s control, will need to find its own. In other words, they need to “guarantee governability” if they aspire to “Make Argentina Great Again,” as they like to say.
Fortunately for them, the path is relatively clear. The historic league of governors has formalized its alliance under the Provincias Unidas banner. Together with other provincial parties not formally under the coalition, they will be relevant in the legislative makeup settling into Congress. Governors and provincial leaders hold the keys that Milei and Caputito need, together with whatever Mauricio Macri’s PRO, Rodrigo De Loredo’s strain of the Unión Cívica Radical (UCR), and Miguel Ángel Pichetto can muster.
The “political anchor” would come in the form of agreements with provincial governors and friendly political forces that would allow the Casa Rosada to pass its 2026 Budget bill and key legislation. Clearly this means negotiations and consensus, as opposed to insulting rhetoric and chainsaw austerity. It also means Milei will have to cede aspirations of total control over state revenue and potentially accept lower budget surpluses.
The Critical Question
Taken together, Milei and the two Caputos have the path laid out. The “two anchors” that will give them a possible future are tied to applying necessary adaptations to economic policy and creating conditions for circumstantial legislative majorities. Yesterday’s surprisingly strong electoral performance has given them renewed political capital and removed the immediate crisis atmosphere that threatened to derail the administration.
This situation now appears possible under the favorable electoral scenario that materialized. The real question is whether Milei and his crew are willing and able to pull this off. It’s not an easy task, particularly in the current Argentine context, where the past three administrations tried and failed (Alberto Fernández, Mauricio Macri, and Cristina Fernández de Kirchner).
Yet having already consolidated the idea of a balanced budget as a majority position within the Argentine political ecosystem, the potential allies are clear. The idea that structural reforms are necessary has also become engrained in the collective political subconscious of more rational actors within the political class. The relatively recent implosion of the “Kirchnerite miracle” under CFK’s tenure, together with Macri’s bombastic failure and the Fernández-Fernández fiasco, have left their mark and supposedly their lessons.
Milei’s Choice
Yesterday’s victory gives Milei a genuine opportunity for a fresh start. He won both the national vote and Buenos Aires Province—outcomes that seemed unlikely just weeks ago as currency markets collapsed and corruption scandals mounted. The Trump administration’s unprecedented $40 billion bailout provided crucial cover, but it was Milei’s core support that ultimately delivered at the ballot box.
Now comes the harder part: governance. Will Milei interpret this victory as validation of his confrontational style and double down on polarization? Or will he recognize that winning an election is different from building a sustainable governing coalition?
The biggest liability, as mentioned above, is none other than Milei himself. His tendency to abuse political momentum to castigate opponents rather than build bridges, his inability to compromise, his penchant for cultural warfare over consensus-building—these traits could easily squander the opportunity yesterday’s results have provided.
Argentina’s future now depends on whether Milei can evolve from raucous outsider to statesman, whether he can channel yesterday’s victory into the unglamorous work of legislative negotiation and coalition maintenance. The tools are there: US financial backing, a balanced budget, declining inflation, potential allies in provincial governors and moderate opposition figures, and now renewed electoral legitimacy.
The question is whether Milei will use them wisely—or whether he’ll crash once again, taking Argentina with him. Everything changed yesterday, but whether it changed for the better remains to be seen.
This piece was originally published in the Buenos Aires Times, Argentina’s only English-language newspaper.