Milei Coalition's Loss in Buenos Aires Calls Argentine Libertarian Movement's Strength Into Question

President Javier Milei suffered a stinging defeat in Buenos Aires. His coalition, La Libertad Avanza (LLA), finished nearly 14 percentage points behind the opposition in Sunday’s local legislative elections. Because Buenos Aires accounts for 40 percent of Argentina’s electorate, the race serves as a stress test for Milei’s movement ahead of October’s national legislative elections.

The Peronists, Argentina’s dominant left-populist movement, not only held first place but widened its lead compared to the 2023 elections by two percentage points. Milei’s coalition with the center-right Propuesta Republicana (PRO) improved on his solo run two years ago, but the combined forces still fell short. Both blocs gained seats, yet the anti-Peronist majority that once seemed within reach evaporated.

“We have suffered a clear defeat today….We must accept the results,” Milei admitted. Yet he insisted that the outcome marked the opposition’s “ceiling” and his coalition’s “floor”—their best game, his worst.

“The course we were elected to follow in 2023 will not change, but rather will be redoubled,” Milei said, promising to deepen austerity and market reforms. “Either freedom advances, or Argentina regresses.” Finance Minister Luis Caputo reiterated the message on X: “Nothing will change economically. Not in terms of fiscal policy, monetary policy, or exchange rates.”

Peronism’s formidable machine once again proved decisive. Decades-old networks of mayors and local operators, motivated by jobs and budgets, can reliably mobilize voters in Buenos Aires Province. But, as Argentine journalist Eloy Vera tells Reason, the same incentive structure doesn’t carry over to national elections. In provincial elections, “the mayors, the local leaders, have to secure their own governability—making sure people will vote for them, will renew their mandate, and that they’ll obtain or maintain majorities in their respective municipal councils,” he explains. Once they have secured reelection, it “means they may not mobilize with the same intensity, and won’t deploy the whole clientelist machine—political operatives, poll watchers, buses, etc.—for the national elections.”

LLA’s poor performance can be traced to a mix of problems: corruption allegations involving Milei’s inner circle, weeks of coalition infighting, and the president’s abrasive style, which rallies loyalists but alienates swing voters. As Vera notes, even the movement itself disagrees over what went wrong. Was it the government’s “brutal” austerity program? A chaotic campaign? Or simply poor execution? Each faction can claim a piece of the truth, making a sweeping course correction unlikely in the near future.

Markets registered the political shock in real time: The peso weakened, country risk spiked, and Argentine equities plunged in New York. Even before the election, the Argentine Treasury was considering intervening in the exchange market. As La Nación‘s Guillermo Idiart noted, markets are less interested in new fiscal promises than in political assurances that Milei’s program can endure.

The defeat also reshuffled Peronist politics. Cristina Fernández de Kirchner—former president and longtime party leader whose legacy is now clouded by corruption charges—saw her influence fade. By splitting the Buenos Aires provincial election from the national vote in October, Buenos Aires Gov. Axel Kicillof bolstered his standing and positioned himself as the new face of Peronism. As political scientist Andrés Malamud told Infobae, Kicillof’s success marks “the overcoming of the Kirchnerist stage of Peronism” and a return to the movement’s core identity—popular appeal and a sharp instinct for power.

For now, Kicillof’s reach is still provincial, but the broader lesson is clear: Peronism’s obituary, written after Milei’s rise, was premature.

This doesn’t mean the opposition did something extraordinary, nor that Argentina’s Libertarian moment is dead in the water. October’s national elections will show where the rest of the country stands with Milei’s administration.

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