Argentines still love the big state, says top Peronist

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One of Argentina’s leading Peronists has said that many Argentines still want “a bigger and better state” despite the election of libertarian President Javier Milei on a pledge to slash public spending in the high-tax, high-regulation country.

Axel Kicillof, governor of Buenos Aires province and the most powerful elected official in the leftwing Peronist opposition, told the Financial Times that foreigners who see the rightwinger’s rise last year as proof of epochal change should think again.

“My campaign was very clear that we were offering a present state, a bigger and better state,” Kicillof said of his comfortable re-election in October 2023 in Buenos Aires province, which is home to 38 per cent of Argentina’s 46mn people. Milei narrowly lost the presidential run-off there to the Peronist candidate.

“Nothing Milei has said, even though he won the election, represents the deeply held ideas of Argentine society or some sudden change in the Argentine people’s cultural, historical [values],” Kicillof added. “His victory was about . . . dissatisfaction and anger with politics, which is not exclusive to Argentina.”

Milei won November’s presidential run-off on a pledge to “take a chainsaw” to the state. If followed two decades in which Peronist governments had almost doubled the size of the public sector and printed money to fund spending, fuelling severe annual inflation that peaked at almost 300 per cent earlier this year.

The Peronist movement — which began in the 1940s with an alliance between president Juan Domingo Perón, an army lieutenant-general, and labour unions, and has dominated Argentine politics ever since — has struggled to respond to the sudden rise of the libertarian Milei, who won some votes from Peronism’s traditional working-class base.

Kicillof said Peronism was going through “a process of analysis and reorganisation”.

He was vague about what kind of message they should use to campaign for the midterm elections in late 2025, saying: “There are messages that are more than messages: needs, emergencies, that have to do with rebuilding the quality of life of enormous sections of the population.”

Argentina’s Peronist former president Cristina Fernández de Kirchner, who ruled from 2007 to 2015 and pulled the movement sharply to the left, is running to retake the main Peronist party’s presidency.

Kicillof served as Kirchner’s economy minister and was once her political protégé, but has refused to endorse her bid. Apparently alluding to him, Kirchner told a labour union conference last week: “There’s no room for Pontius Pilates or Judases in Peronism.”

How is Kicillof’s relationship with the former president today? “Permanent,” he replied without elaborating. Pushed on how often they spoke, he said “it depends on the moment”.

Kicillof would not say if he himself hopes to be Peronism’s 2027 presidential candidate. “Discussing who will succeed Milei at this stage is for fortune-tellers,” he said. “But I will dedicate all my efforts to the construction of a political alternative capable of pulling Argentina out of this tragedy.”

He said Milei’s austerity had inflicted “tragedy” on Argentina, adding that demand at soup kitchens in some towns in his province had quintupled. The national poverty rate reached 53 per cent in the first half of the year, up from 41 per cent in the second half of 2023.

Kicillof accused Milei of “defrauding” voters with election slogans that said Argentina’s “[corrupt elites] will pay for the austerity” he promised to implement. Private economists have estimated that more than 40 per cent of Milei’s reduction in spending has come from not fully increasing pensions and social programmes in line with inflation.

“People thought that a small privileged minority would suffer austerity and that would solve all their problems,” Kicillof said.  

Economists say the root of Argentina’s economic crisis is high government deficits funded by money-printing and tight restrictions imposed on businesses by previous governments. 

Kicillof admitted that the 2019-23 Peronist government “did not achieve all the results that had been expected”, offering as an example its failure to create high-salaried formal jobs.

Peronism has also been hit by a series of corruption scandals in recent years. During last year’s election campaign judicial authorities opened an ongoing illicit enrichment investigation into Kicillof’s chief of staff Martín Insaurralde after he was photographed on a luxury yacht in the Mediterranean drinking champagne at a time when Argentines were suffering a deep economic crisis. Insaurralde’s lawyer did not respond to a request for comment.

Kicillof, who has faced several corruption investigations and has never been convicted, said Argentina’s judiciary had been corrupted by political motives. Of Insaurralde, he added: “Everyone is innocent until the opposite is proven.”

Milei has blamed Kicillof for costing Argentina billions of dollars by championing the nationalisation of 51 per cent of the Argentine energy group YPF in 2012 when he was a minister. A New York court has ruled Argentina liable for up to $16bn in damages in a case financed by litigation funder Burford Capital.

The plaintiffs are former minority shareholders to whom the state failed to make a tender offer as stipulated by the company’s bylaws. Argentina is appealing against the judgment.

Kicillof told the FT that Argentina’s constitution enabled the state to “recover” companies when it was in the national interest, and that it was driven to do so by the “absolute decline” of YPF in the years prior to the expropriation, which dragged down the country’s energy exports.

“Some people claimed the bylaws of YPF, which were written by those that privatised the company [in 1992], were more important than Argentina’s constitution,” he said. “This is a matter of Argentine law, a question of Argentine sovereignty.”