Trump conditions support for Argentina on victory in Congress

A $20 billion support package announced by Washington will depend on Milei's party's performance in legislative elections in October, Trump said, as he campaigned for "poll numbers" to improve. US President Donald Trump hosted his Argentine counterpart, Javier Milei, at the White House for lunch on Tuesday (14/10) and expressed full support for the ultra-liberal leader, although he created uncertainty by making the financial aid conditional on Argentina's political future.

The aid package, announced days earlier by the US government, provides for the injection of 20 billion dollars (R$ 109 billion) into the South American country through financial and exchange operations, with the aim of stabilizing the Argentine economy.

According to Trump, the offer comes in response to the "great work" Milei has done since coming to power and should not be questioned by the opposition. However, his intention to financially support the Argentine president's government is conditional on one condition: that his party, Libertad Avanza, win the October 26 legislative elections, which are crucial for implementing Milei's proposed economic reforms.

"Our decisions are subject to whoever wins the election, because if a socialist wins, we feel very differently about making the investment," Trump explained before a working lunch with Milei and her team. "Her poll numbers are very good, but I think they'll get better after this," Trump wagered.

"If he doesn't win, we're leaving"

The Republican went further, warning that he does not want to see the left return to power in the South American country. "If he loses, we will not be generous to Argentina," he declared. "If he doesn't win, we'll leave," the American president emphasized, placing Milei at a political crossroads.

A minority in Congress, the Argentine president's party needs to gain seats to deepen its liberal reforms and secure market confidence, but it has no prospect of achieving a majority, especially given the country's recent political scandals.

In the latest case, Milei's close aides are accused of corruption. The president's sister and right-hand woman, Karina Milei, is identified as one of the main beneficiaries of a scheme involving bribes in the purchase of medicines for people with disabilities.

The bailout offered by Washington after four days of negotiations last week served to "overcome this liquidity problem that Argentina had as a consequence of the political attacks we suffered from our opponents, who do not want Argentina to embrace the ideas of freedom again," according to Milei.

Precarious economy

Having been in power for almost two years, Milei has implemented a very aggressive austerity and deregulation agenda. Major fiscal measures, such as cuts to subsidies and social benefits, have increased the costs of energy, transportation, and other essential services for the most vulnerable populations, exacerbating poverty and inequality.

Although public spending cuts have generated a fiscal surplus and prevented hyperinflation, Argentina remains in a precarious financial situation. The consumer price index has increased 31.8% over the last twelve months, according to the latest official data.

In addition to seasonal increases, there were price increases linked to the high volatility of the US dollar exchange rate on the Argentine foreign exchange market during August and September, in the context of uncertainty among investors regarding the legislative elections of October 26 and the inconsistencies in Milei's economic program.

With the US aid package, Argentina hopes to strengthen its ability to cope with exchange rate pressures. Argentina already has a $20 billion loan with the International Monetary Fund (IMF) and a currency swap agreement with China.

sf/cn (EFE, AP, DW)