«Mr Milei’s economic team is in Washington, trying to hash out the details of the bail-out and buy some calm. Yet even if they can navigate American politics, the Argentine variety may swamp them. A serious loss in the midterms would all but end Mr Milei’s radical economic reform programme.
The coming weeks will be tough. Voters consider Mr Milei’s success in pulling down inflation to be old news. Corruption allegations and the gyrations of the peso dominate the headlines. It is still—just—possible that Mr Milei could emerge after the elections with markets calmed and his political hand strengthened. But he needs to make it to October 26th without more exchange-rate chaos, and then win enough seats in Congress to convince markets that his reform project is still alive. (...)
Then Mr Milei needs to win, or at least take enough seats to allow him to defend his presidential veto. But his electoral strategy is in trouble. His dogmatism has alienated powerful provincial governors. He came to power in 2023 raging against “la casta”, the corrupt political elite. “I’m hungry for the whole caste,” he roared again during his concert. And yet he has been hit by three big corruption scandals this year.
The first was over his promotion of a dodgy cryptocurrency that soon collapsed in value. Then, in August, leaked audio messages led to allegations that his sister was taking kickbacks from purchases of medicine by the state disability agency. The latest blow was on October 5th, when José Luis Espert, the leading candidate of Mr Milei’s party in Buenos Aires, whose face is already on the ballot papers, stood down. He admitted to receiving $200,000 from a man indicted in the United States for drug-trafficking, but says it was for legitimate consulting work. In all three cases those involved deny wrongdoing.
Curbing rampant inflation is the other pillar of Mr Milei’s pitch. Fast-rising prices used to be voters’ biggest worry, but unfortunately for him they have moved on, and now corruption tops the list. That inflation concerns have ebbed is a testimony to Mr Milei’s success, but he has failed to pivot to other issues. An overvalued peso helped to curb price growth, but propping it up has both hurt employment and exacerbated the exchange-rate crisis. Now more voters worry about jobs than inflation.
Polling suggests Mr Milei’s party still has a chance. But momentum is against it. He will need more than rock concerts to turn things around.»

