Politics Economy Country 2025-11-04T04:22:45+00:00

Argentina's Government: Budget and Negotiations with Governors

Argentina's government, led by Javier Milei, seeks to pass the 2026 budget and establish dialogue with governors following the midterm election victory. The strategy aims to strengthen investor confidence and address economic issues, including negotiations with the IMF and the US.


Argentina's Government: Budget and Negotiations with Governors

The government has the opportunity to start following a virtuous path. It is also close to a trade agreement with the United States. On the contrary, the pending issues for the governors are multimillion-dollar: they start with the law on the distribution of ATN funds, vetoed by Milei and rejected by Parliament. The "goal" that would help consolidate expectations is the 2026 Budget, a tool whose passage is now desired by the government itself (as well as the IMF). The victory of La Libertad Avanza in the midterm election cleared fears and reversed the distrust of economic agents, who, unlike what happened between August and October, showed this past week a willingness to take risks. The goals Javier Milei set for the second half of his term have become closer, not only because of the larger number of legislators LLA and its allies will have in Congress, but also due to the reconfiguration of his political team. However, the effectiveness of that contact will not only come from the negotiating skill he developed throughout his career, first in Menemism and then in PRO. Now the goal is to score the first goal. Diego Santilli will be the main interlocutor with the governors. This is because after all the setbacks this year with laws that increased spending, the Executive Branch realized that if it didn't have real numbers to defend, the goal for which it was fighting with the opposition was fictitious. In Casa Rosada, Milei held two summits with elected deputies and senators from La Libertad Avanza. The official government is playing its last card to postpone the budget report. The officialism intends to get a committee report with some urgency. The stage ahead will not be marked by simple discussions. For the provincial leaders to respect him, he will have to demonstrate that they can build a solid bridge with the Ministry of Economy. It is a way to buy time, as the real negotiation will take place in the next 40 days, the time left for the deputies and senators elected on October 26 to take office. Is there any other management instrument available to sustain expectations? The "new" cabinet generated good reactions, although showing the team photo only serves to give an initial boost to the bets.