Mattress dollars and reforms: without laws there is no paradise
Since Monday, some libertarians in the financial world have been repeating something impossible to verify. They say that if Adorni had beaten Silvia Lospennato by just five points in the Buenos Aires elections, and not the 15 points ultimately shown by the results, Argentina's country risk would have soared to 1,000 points. This is unprovable because none of that happened: the government candidate won by a larger margin than expected, and the JP Morgan indicator yesterday was still around 668 points. But the counterfactual idea serves to illustrate the importance that the Casa Rosada continues to attach to Sunday's victory.
The victory surprised everyone. The market also seemed to celebrate the fact that the fight between La Libertad Avanza and Pro had found a winner, perhaps assuming that waiting until October would have caused Milei unnecessary wear and tear. Argentine bonds, for example, closed the week with increases exceeding 1% on average, in a difficult context for emerging countries. In any case, what was defined on Sunday was a leader for that non-Peronist space that, in the minds of savers and investors, represents the end of economic delusions. "Freedom or Kirchnerism" was Adorni's slogan. "Kuka risk," Marcos Galperin even called him on Twitter.
The political variable has become decisive in economic analysis. It was felt again two Tuesdays ago, at a breakfast held by a delegation of representatives from retail companies and banks from Miami at the headquarters of AmCham, the North American Chamber of Commerce in Argentina. What will happen in the October elections and, more specifically, what chances does the ruling party have of gaining a parliamentary base to implement reforms? was the recurring question. Putting the macroeconomic framework in order is one thing, and making the country truly viable is another. Juan Gómez Minujín, president of JP Morgan and AmCham, reiterated the concept this week at the forum attended by Milei and the Minister of Economy, Luis Caputo: "Stabilization is not enough; we need a framework that allows for planning, investment, and growth."
These are medium- to long-term goals. They will require time , and perhaps several administrations and elections in which the abyss is not an option. For the government, however, Sunday's election may have been a turning point that gave it courage and even served as a message internally: it was the first vote endorsement for Karina Milei as a point guard, and in a difficult place, the Federal Capital, where it was still in doubt whether kicking Ramiro Marra out of the running had been a mistake. "If we lost by two points, the conclusion would have been: 'Those were Marra's points,'" said someone who worked on the campaign.
However, unlike what seemed to be happening in the province of Buenos Aires , the "iron triangle" worked in the city almost without friction. Santiago Caputo, Karina, and their respective teams, including Pilar Ramírez, the presidential secretary's assistant, met twice a week to follow the strategy. Caputo was even the first to insist that if Marra ultimately headed his own list, a candidate should be designated who identified with the President as much as, or more than, the legislator. "It's Adorni," he suggested. "Is it worth getting rid of someone who's been doing a good job as spokesperson?" was the objection. But none of the proposed alternatives, not even that of Federico Sturzenegger, whom they even tested in the city, managed to convince enough.
Certain that it must lead the ideological space vacated by Macri, the government needs to confront Kirchnerism. That's why it nationalized the Buenos Aires debate. That will also be its strategy in the province. With its own libertarian imprint and tools, just like in the Federal Capital, where even an offer from someone claiming to have a contact for advertising on bus windows was rejected. "I can't think of anything more caste-like," Caputo objected. In that district, only five billboards featuring the candidate's face were used, and the rest were divided between two channels: social media and, only for the purpose of creating clips to broadcast on those networks, TV interviews. Not much more.
What comes next , however, will be more difficult. The government needs to form an alliance with Pro, a group still troubled by episodes like the fake Macri video created using artificial intelligence. "But three fat freaks from Twitter did it!" defends La Libertad Avanza, which also considers that such pieces generally have a neutral effect on the electorate.
But some grudges will have to be unwound. That's why Macri's call to Milei the day before yesterday was so relevant . "An initiative of our own to lower the decibels," people close to the former president described it. But we can't expect drastic changes in La Libertad Avanza either. The ruling party's campaign team assesses that the electorate doesn't focus so much on the President's tone of voice or his attacks as on his achievements. The polls show this: public order and falling inflation in the poorest sectors, and both plus a cheaper dollar among the middle and upper classes. There are concepts that continue to appear in focus groups and bear the hallmark of these times. That of a beneficiary of a social program, for example, who celebrates that he now doesn't have to give up any of his income to political figures and that he is also not required to "go to the marches." These same surveys reveal that the obsession with the CPI cuts across all social strata. "Do you know what a job it is to change prices every week?" a merchant added.
Negotiations with Pro will be conducted through those closest to them. Cristian Ritondo , whom the government already thanks for avoiding criticism even at the height of the dispute, came forward as soon as the chips were down. "He juggled his rhetoric," they describe.
The rest will be up to Macri, who is not only battered by the defeat but also conditioned. Starting Sunday, if he intends to work to preserve the city of Buenos Aires in 2027, he will have to negotiate governability with La Libertad Avanza in the Legislature. He wouldn't be able to do so with Rodríguez Larreta, still exulting over the 8% that allowed him to secure three seats: the former mayor is privately celebrating a rematch.
The government will offer Pro to form fronts only in the provincial elections in Buenos Aires, where the old paper ballots are contested in eight sections and where the Macri-supporting mayors will surely have a significant influence. They will also reserve the name and brand of La Libertad Avanza for the national elections. What good would it do, for example, to compete with their own list against Pablo Petrecca, mayor of Junín, or Guillermo Montenegro, of Mar del Plata? Why waste energy in Vicente López, where Soledad Martínez has almost 60% of the vote? They are even willing to negotiate with Maximiliano Abad's Radicals.
Because it doesn't serve any of them if Pro splits. But even less so for the government, which aims to secure a minimum of 120 representatives, a good number considering there will also be a non-Kirchnerist PJ (Party of the People's Party) and governors willing to discuss each project. This will be the heart of the coming period. Even the announcement the day before yesterday regarding the mattress dollars indicates that Parliament is decisive. This is what business owners and savers also believe: without laws, there is no paradise.
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