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The unlikely alliance that could shape Argentina’s radical new leadership

Less than 24 hours after hard-right libertarian outsider Javier Milei swept into Argentina’s presidency on a promise of radical economic change and a break with the country’s traditional political elite, a critical member of that elite arrived on his doorstep.

Mauricio Macri, Argentina’s conservative former president who gave Milei a valuable endorsement in October, dropped by on Monday night for an unexpected visit at the hotel in downtown Buenos Aires that became Milei’s campaign bunker.

“What are we going to talk about if not the future of the country?” he told reporters in the lobby.

Macri — who ruled from 2015-19 and took out Argentina’s hated loan program with the IMF after a failed attempt at economic reform — has one of the lowest approval ratings in Argentine politics.

From a multi-millionaire family, and having spent two decades in politics, he is part of the establishment that Milei has spent his career railing against. In an interview four years ago, Milei called Macri “evil” and “a second-rate populist”.

But the former leader’s endorsement — which followed the first-round elimination of Patricia Bullrich, the presidential candidate for Macri’s centre-right Juntos por el Cambio (JxC) coalition — helped win over crucial moderate voters for Milei, an eccentric former television personality who has previously expressed support for controversial ideas such as legalising the sale of human organs, and has traded insults with Pope Francis.

Argentines are watching ahead of the December 10 inauguration to see how much their budding alliance shapes Milei’s government.

Javier Milei, Mauricio Macri and Patricia Bullrich sit together in Buenos Aires
From left, Javier Milei, Mauricio Macri and Patricia Bullrich at Milei’s campaign headquarters in Buenos Aires © Handout/Reuters

Milei has yet to announce his economy minister, but several of the names reported by local media to be in contention are officials from Macri’s government, including former central bank chief Federico Sturzenegger and ex-finance minister Luis Caputo — though others not from Macri’s party are also being considered.

Further cabinet posts and hundreds of more junior roles will be filled in the coming weeks. Milei’s small, two-year-old party, La Libertad Avanza, is made up mostly of political novices, and his team has said that “talent” from JxC will be welcome. 

While hardcore supporters of Milei’s party may dislike Macri, the ongoing discussions with his party have assuaged some concern among voters and investors about the president-elect, a self-described “anarcho-capitalist” with no executive experience who has proposed a radical plan to eliminate the central bank and replace the peso with the US dollar. 

But one JxC member said there was no formal agreement between Macri and Milei. “It’s very fluid,” he said. “What is happening is individual appointments of people who have worked with Macri and who support Milei’s ideas. Milei doesn’t want to cede space to any one political party.”

Macri, he added, “isn’t going to accept a job with Milei, but I see him trying to build a new political alternative where he will remain a protagonist . . . These are not the actions of someone who wants to retire.”

Macri and Milei have met only a handful of times. Macri is the son of a multi-millionaire tycoon and made his way to Argentina’s presidency via the presidency of Boca Juniors football club and then the mayoralty of Buenos Aires. Milei grew up in a lower middle class neighbourhood and swept to popularity on a social media-powered anti-establishment campaign.

However, there is common ground. Analysts said that both speak the language of the private sector, and that Macri has abandoned consultant-approved speeches to become a more spontaneous speaker since he left the presidency, more freely expressing his frustration about Argentina’s economy.

“Javier admires him. He trusts him, and there is maybe chemistry between them, so he will listen to his [advice],” said one LLA insider. “But Javier will be the president.”

Argentina's president-elect Javier Milei at a campaign rally and delivering his victory speech

Macri views Milei’s presidency as a second chance at his failed attempt to fix Argentina’s dysfunctional economy, said Juan Cruz Díaz, managing director at Argentine consultancy Cefeidas Group. 

Many economists say that the JxC government, which was made up of Macri’s rightwing PRO and centre and centre-left parties, moved too slowly to cut Argentina’s chronic fiscal deficit, relying instead on hefty borrowing to finance spending. The strategy imploded during a 2018 markets crisis, prompting Macri to take out the biggest loan in IMF history, a $57bn package that quickly went off the rails.

The Peronists, a left-leaning populist movement that has dominated Argentine politics for decades, won a decisive victory in 2019 elections.

“Macri sees Milei’s win as a vindication of his ideas, because he feels he was prevented from going fast enough by other forces in his coalition,” Díaz said. “He has always felt like people underestimated him and his choices, so it’s a personal vindication too.”

Macri’s and Bullrich’s decision to endorse Milei has triggered the disintegration of JxC. Elisa Carrió, leader of the centrist member party Coalición Cívica ARI, has declared it “broken”. She has also blamed Macri, who had indicated support for Milei even before Bullrich’s elimination, for the failure of the JxC candidate.

Lucas Romero, director of Buenos Aires-based pollster Synopsis, said that Macri probably expects to have influence “on both the direction of the government and its composition” in exchange for his energetic contributions to the campaign.

But the relationship may prove tumultuous, he added. “From the first 48 hours after the election, it’s not clear to me that Milei understands what happened in the same way that Macri does,” he said, citing disjointed communications from the libertarian’s office. “If Milei thinks that the 56 per cent of the vote he won belongs only to him, he is misreading the result.”

LLA has just 38 seats in Argentina’s lower house, and seven in the senate, so Milei will need the votes that Macri has promised will come from the PRO — though no formal coalition has been announced. But that would still only amount to a third of seats in the lower house and a fifth in the senate.

Milei’s government may thus struggle, with or without Macri, to deliver the comprehensive reform that most economists say is needed to stabilise and eventually revive Argentina’s spiralling economy. 

Inflation is running at 142.7 per cent, foreign exchange reserves have been almost entirely wiped out, and interest on a pile of debt with domestic creditors has ballooned to crippling levels.

Milei’s government faces a more difficult picture than Macri’s did when it began in 2015, said Guido Sandleris, a former central bank chief under Macri and a professor at Buenos Aires’ Torcuato di Tella University and Johns Hopkins in Washington, DC.

 “They have three disadvantages: the economic situation is much worse after [Peronist economy minister Sergio] Massa, they have less experience, and less support in congress.

“But they do have one key advantage: the population today is much more aware of the need for a deep change.”

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