Argentina’s struggling President Javier Milei has suffered a new setback as Congress overturned his vetoes of laws increasing funding for public universities and for paediatric care.
On Thursday, senators invalidated both vetoes, which had already been rejected by the Chamber of Deputies, bringing to three the number of laws upheld by Congress despite vehement opposition from the budget-slashing Milei.
Milei, who has implemented deep austerity policies to reduce the size of government, had said the new spending would jeopardise Argentina’s fiscal balance.
The Senate’s vote comes as the United States-backed Milei struggles to end a run on the national currency, the Argentinian peso, in the run-up to the crucial October 26 midterm elections.
The 54-year-old right-winger, in power since December 2023, has been on the ropes since his party’s trouncing by the centre-left in Buenos Aires provincial polls last month.
Those elections, seen as a bellwether ahead of the midterms, shredded his aura of political invincibility and sent markets into a tailspin.
“There’s a sensation of disenchantment and anger with the impact of the cutbacks,” said Sebastian Halperin, a political consultant in Buenos Aires.
He added that Milei had failed to build alliances with governors who influence how their province’s legislators vote in Congress.
Last week, the US government announced it was in talks with Argentina on a $20bn swap line aimed at shoring up the peso.
US President Donald Trump sought to buoy his close ally at talks in New York last week, saying: “He’s doing a fantastic job.”
The two are expected to meet in October as Milei seeks to secure a credit swap line from the US.
Analysts say, however, the president still needs a strong result in the midterms to avoid compromising the progress he has made in steadying Argentina’s economy.
After rallying briefly, the peso slumped again this week over market uncertainty about the amount and extent of the US financial help on offer.
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