Milei’s mid-term election win in Argentina exposes bankruptcy of Peronism and pseudo-leftist FIT-U

Fátima Ferrante

Argentina's President Javier Milei and US President Donald Trump at February 2025 CPAC conference. [Photo: ar.usembassy.gov]

Argentina’s fascistic President Javier Milei scored a surprise victory in the country’s October 26 mid-term elections, held amid deepening social, economic and political crises at home and escalating US imperialist aggression across Latin America.

Milei’s party, La Libertad Avanza (LLA), gained seats and obtained over 40 percent of the vote nationally across both houses, while the nominal “opposition,” the Peronist coalition Fuerza Patria, and its allies, secured around 30 percent of the vote. LLA won in most provinces, including Buenos Aires Province, which historically has been a Peronist stronghold.

The elections renewed 127 seats in the Chamber of Deputies (about half of the lower house) and 24 in the Senate (a third of the upper house). LLA increased its hold from six to 19 senators and from 37 to 93 deputies, thus securing a one-third blocking minority in the Chamber of Deputies (86 seats needed out of 257). This would allow Milei to sustain his presidential vetoes against opposition legislation, which cannot be overruled without a two-thirds majority in Congress.

The Fuerza Patria coalition saw a slight reduction in its representation in the Chamber of Deputies, reducing its number of seats from 98 to 96 deputies, and a more significant decrease in the Senate, from 30 seats to 22 seats.

While the outcome is being touted in the media as an endorsement of Milei’s economic agenda of harsh austerity—symbolized by his wielding a chainsaw—the mid-terms saw the lowest turnout (67 percent) since the fall of the dictatorship in 1983. In other words, one-third of the electorate did not go to the polls, which is a legal obligation in Argentina. In the contests for the Chamber of Deputies and the Senate, approximately 59.3 percent and 57.8 percent of the vote, respectively, went to parties other than the LLA.

Prior polling had indicated a tight race between the LLA and Fuerza Patria. Although Milei had won the presidential election in 2023 with a 56 percent majority, his popularity since then has dropped to an all-time low of around 40 percent. Despite monthly inflation stabilization, in his first year of office, the price of public transportation rose 206 percent, housing and utilities soared 276 percent, healthcare increased 184 percent, and education 180 percent. Unemployment rose to 7.9 percent in the first quarter of this year, the highest level in four years, and after Milei took office, the poverty rate rose to its highest level in two decades.

Moreover, LLA is mired in corruption scandals: from a crypto scam involving Milei himself, to allegations of a pay-to-play regime run by Karina Milei, his sister and Secretary-General of the Presidency, to drug allegations against José Luis Espert, a leading legislative candidate for LLA in Buenos Aires Province, who had to suspend his campaign in the first week of October.

Just days before the mid-term elections, Minister of Foreign Affairs Gerardo Werthein and Minister of Justice Mariano Cúneo Libarona resigned, highlighting internal political instability and disputes.

After LLA suffered a loss of about 13 to 14 percentage points to Fuerza Patria in the provincial elections held on September 7 in Buenos Aires, the most populous province of Argentina, concentrating 40 percent of the national electorate and over 30 percent of the country’s GDP, markets panicked, and the value of the peso plummeted. Argentina’s Central Bank was forced to spend $1.1 billion of its foreign currency reserves in just three days to prop up the peso and prevent a collapse, and the United States intervened with a massive $40 billion financial bailout package that includes a $20 billion currency swap and an additional $20 billion in financing from sovereign wealth funds and private banks.

Less than 48 hours before the legislative elections, Jamie Dimon, the chairman and CEO of JPMorgan Chase and former economic adviser to both Barack Obama and Trump, arrived in Argentina amidst ongoing discussions about the broader financial assistance package meant to back the Milei government. JPMorgan Chase was evaluating participation in this credit line of $20 billion. Aside from Milei, ministers and local businessmen, in attendance at the events hosted by Dimon were also war criminals Tony Blair, current head of JPMorgan’s international council, and Condoleezza Rice, a partner of the financial group.

Significantly, Milei’s minister and vice minister of economy and the president and vice-president of Argentina’s Central Bank all made their fortunes working for JPMorgan in New York in the 1990s and early 2000s, helping wring profits out of the immiseration of the working class in Argentina and across the region.

The US aid package constituted more than election interference; it amounted to blackmail. Only 12 days before the vote, US President Donald Trump shamelessly conditioned the bailout on Milei’s victory. “If he loses, we are not going to be generous with Argentina,” Trump declared, amid predictions of the worst economic crisis since 2001. In reality, the bailout will flow directly into the coffers of the major banks and hedge funds, including some of Trump’s closest supporters, while Argentine workers are forced to pay the price.

The Argentine events must be viewed within the context of the Trump regime’s drive to revive the Monroe Doctrine and reclaim Latin America as the “backyard” of US imperialism. This has been expressed most clearly in the extrajudicial murders off the coasts of Venezuela and Colombia under the false pretext of combating drug trafficking, together with Trump’s authorization of CIA operations in Venezuela to overthrow the Maduro government and the imposition of sanctions against Colombian president Gustavo Petro for criticizing US aggression.

There are also plans to establish an FBI anti-terrorism center on the triple frontier between Paraguay, Argentina and Brazil, based on an agreement signed between the US and Paraguay. Blackwater founder Erik Prince’s recent visits to Ecuador and Peru to pitch the deployment of US mercenaries to train local police and military forces are also cause for concern.

On September 29, some days after it became known that Trump would provide a financial lifeline to Milei, bypassing congressional authorization, Milei signed a Decree of Necessity and Urgency (DNU) authorizing the entry of US military personnel (including Navy Seals) for unprecedented joint exercises at strategic naval bases in the South Atlantic (Mar del Plata, Puerto Belgrano and Ushuaia), called “Operación Tridente,” between October 20 and November 15, overlapping with the elections.

In what has become customary in Latin American countries where fascist forces are on the rise, the nominal “opposition” has focused on making nationalist appeals. The Peronist Mayor of Ushuaia, Walter Vuoto, denounced the military exercises as sacrificing Argentine sovereignty, noting that Ushuaia is strategically important as the “doorway” to Antarctica and for protecting Argentine claims over the Malvinas.

Far from representing a genuine opposition, the Peronists enabled Milei’s rise to come to power and facilitated his agenda. The low voter turnout is an indication of the Argentine working class’s deep disillusionment with the Peronists as they negotiate some of Milei’s most brutal attacks on social institutions and democratic rights and as the Peronist-led union bureaucracies, like the General Labor Federation (CGT), block demands for general strike action.

The lack of an alternative to both Peronism and Milei is mainly the responsibility of the so-called Left and Workers’ Front (FIT-U) coalition. Employing pseudo-leftist and anti-imperialist rhetoric, the FIT-U closed its legislative campaign by holding a rally in front of the US Embassy in Buenos Aires on October 22 to denounce the “colonial pact” between Milei and Trump. Nicolás del Caño of the Morenoite Socialist Workers Party (PTS), a FIT-U deputy for Buenos Aires Province, declared, “We are the only force that will fight not to be just another star on the Yankee flag.”

Prior to the election, the FIT-U held five seats in the Chamber of Deputies, with four of them up for renewal. They were able to retain only three seats in both the City and Province of Buenos Aires, where the FIT-U came in third. The coalition received 851,000 votes, an increase from the last elections, but still far below the 1.3 million it received in the 2021 mid-terms.

The FIT-U ran on a program of reformist policies articulated around making “big business, banks, and landowners pay for the crisis they created” and the need to “invert priorities” and “reorient the economy to the most urgent needs of workers, women, youth, and retirees.”

This nationalist program has nothing to do with mobilizing workers across borders to overthrow the capitalist system—the root cause of exploitation and social inequality—and build a society based on international socialist principles.

The FIT-U’s reformist policies do not meet the urgency of the revolutionary tasks facing the international working class, which confronts the threat of world war and fascist dictatorship, along with relentless attacks on basic democratic and social rights in every country. Their politics are based on promoting illusions in the ability to pressure the Peronist parties and union bureaucracies into fighting Milei and winning concessions for the working class.

The FIT-U does not even label Milei as “fascist” or recognize that fascism is on the rise, limiting themselves to more generic descriptors like “authoritarian” and “ultra-right.” This question is addressed in an opinion piece published in the PTS’s La Izquierda Diario on February 18:

The term “fascism” has gone from being a well-defined political concept to a label that is used for everything, and its use has increased especially since Elon Musk gave a Nazi salute. In this context, figures such as Donald Trump, Elon Musk, Giorgia Meloni, Nayib Bukele, and Javier Milei have been labeled as fascists. But do these figures really represent fascism? Can we say with certainty that they embody this historical phenomenon? The answer is no.

That this position has not been revised since February—after all that has happened since—is unbelievable! For one, Giorgia Meloni is the leader of the Brothers of Italy (FdI) party, the political successor of Mussolini’s Fascist Party, not to mention Milei’s embrace of the legacy of the fascist-military dictatorship of General Jorge Videla or his ties to Benjamin Netanyahu, Trump, Musk, Bolsonaro and a wide network of fascist figures.

According to the same piece, fascism is an inaccurate label because people can still protest on the streets and anti-fascists can fight with neo-fascists online without restriction. In other words, fascism is only fascism when it’s too late to fight against it.

German government prepares assault on social spending, scapegoating immigrants

Peter Schwarz

On October 14, Chancellor Friedrich Merz denounced immigrants as a “problem in the urban environment” that had to be solved through more deportations. Since then, debate over his statement has not subsided and it is becoming ever clearer what the chancellor aimed to achieve with his racist tirade.

Friedrich Merz [AP Photo/Ebrahim Noroozi]

Merz and his government, a coalition of the Christian Democrats (CDU/CSU) and Social Democrats (SPD), are preparing for ferocious conflicts with the working class. They are planning a frontal assault on social benefits on which millions depend for their existence. Such an offensive cannot be carried out by democratic means. They are therefore making migrants the scapegoat for the consequences of their own policies and drawing deeply from the propaganda arsenal of the far-right Alternative for Germany (AfD). In doing so, they are deliberately strengthening the far right, because they need it to divide and suppress the working class.

Financial crisis of the municipalities

Merz’s reference to the “urban environment” was not accidental. The devastating consequences of the federal government’s austerity policy are most evident in the municipalities. With annual spending of €363 billion (as of 2024), the municipalities spend only €100 billion less than the federal states and €200 billion less than the federal government. However, they can finance only a small part of these expenditures from their own revenues and are dependent on substantial transfers from the federal and state governments.

Years of austerity and the impact of the debt brake have reduced these transfers, while new tasks are constantly being transferred to the municipalities. As a result, social spending—mandated by federal laws—has more than doubled since 2009. It now accounts for over 40 percent, and in some regions up to 65 percent, of municipal budgets.

As a consequence, hardly any municipality is still able to make the necessary investments in dilapidated schools, crumbling roads, libraries, leisure centres, nurseries, social services and other socially essential facilities. The situation has deteriorated dramatically over the past two years. The combined deficit of all German municipalities reached €25 billion in 2024—a fourfold increase in just twelve months! For this year, a shortfall of €35 billion is expected.

“Deficits of unprecedented magnitude are piling up, rising cash credits are triggering a debt–interest spiral, and investment is collapsing,” warn the municipal umbrella associations. “The federal financial architecture is completely out of balance.”

In a letter to Chancellor Merz (CDU) and Finance Minister Klingbeil (SPD), the German County Association wrote: “Cities, districts and municipalities have never been in such dire straits.” Investments, it said, were plunging despite additional federal funds.

Under the headline “A storm is brewing over the municipalities” the Frankfurter Allgemeine Zeitung reported: “‘Genuinely’ balanced municipal budgets (that is, without drawing on reserves) have become an absolute exception across the country. In a survey conducted at the start of the year among member municipalities of the German Association of Cities and Towns, only 6 percent said they had managed this. In 2024, the figure had still been 21 percent.”

Merz and Klingbeil have no intention of helping the municipalities. The stranglehold with which they are choking off municipal finances serves to shift the enormous costs of rearmament, war and the enrichment of the wealthy onto the working population.

Hundreds of billions for rearmament

Klingbeil’s medium-term financial plan envisages taking on new debt of €850 billion by 2029—a record amount. This massive mountain of debt is intended to prepare the Bundeswehr (Armed Forces) for war against Russia and make Germany’s infrastructure “fit for war.” The budget therefore contains a gap of more than €170 billion, which Klingbeil plans to close through cuts at the expense of the working class.

In the municipalities, he can rely on an all-party coalition of all the establishment parties—including the Left Party and the AfD. Whatever their public posture towards the federal government, in municipal councils they all implement its austerity diktats. Even if they occasionally complain, not one of them is willing to mobilise any opposition.

The main beneficiary of this all-party coalition of social cutbacks is the AfD. The far-right party now has several thousand representatives at municipal level and is the strongest party in some eastern states.

Just a few days ago, a conference of 500 AfD municipal politicians took place in Berlin, at which MP Stephan Brandner ranted against “migration madness” and “climate nonsense.” Rhineland-Palatinate state parliament member Joachim Paul boasted that at the municipal level, one no longer needed to break down firewalls: “It’s enough just to blow them over.” AfD MP and former mayor of Jüterbog Arne Raue praised: “No one helps us grow more than the establishment parties.”

The state governments, regardless of their political composition, are likewise implementing the federal government’s radical austerity course. Although the debt brake has prohibited them from taking on new loans for five years, the states are still carrying €610 billion in debt—almost a quarter of total public debt, which stands at €2.5 trillion.

They are now drastically cutting education, culture and social budgets. Berlin’s universities alone must save €145 million this year. Ten percent of study places—around 25,000 in total—are to be cut, and staff budgets sharply reduced. The situation is similar in other federal states.

The cuts at municipal and state level are only the tip of the iceberg. The most sweeping attack on the welfare state is being prepared at the federal level.

Business associations and the media are pushing for massive cuts to pensions and health spending. “Even stabilising social expenditure will be difficult enough without benefit cuts; anyone wishing to reduce it must proceed drastically,” writes finance weekly Wirtschaftswoche, calling for the abolition of the mothers’ pension and early retirement without deductions, and for a reduction in the benefit level. “The same applies to health and care; costs are rising almost unchecked.” There are dozens of similar articles and studies.

Merz: “We can no longer afford the welfare state”

In August, Chancellor Merz declared: “We can no longer afford the welfare state.” The government, however, is proceeding step by step so as to dampen the expected resistance. It has outsourced the dismantling of pensions and healthcare contributions to commissions that are to draw up proposals, and as a first measure, decided to abolish Bürgergeld (welfare support) and replace it with a basic allowance.

The purpose of this measure—which will save at most €5 billion—is to pressure the unemployed into accepting virtually any job, no matter how poorly paid. Otherwise, they face cuts or the complete withdrawal of benefits. The same method was used by the “Hartz” laws twenty years ago, which laid the foundations for a massive low-wage sector.

The government’s concern is not only the three million already unemployed, but also the tens of thousands losing their jobs each month. They are to be forced into taking low-paid work immediately. Labour Minister Bärbel Bas publicly calculated that the state saves €850 million per year if 100,000 fewer people claim basic support.

According to Enzo Weber of the Institute for Employment Research (IAB), “For over two years, more than 10,000 industrial jobs have been lost every month.” The auto industry is particularly affected. These are typically skilled, relatively well-paid jobs on which many other jobs depend.

This jobs massacre is being intensified by the trade war with the US and China. Traditional manufacturers such as Ford and Opel (Stellantis) are now threatening to close their German plants entirely. VW, Porsche, Mercedes and other carmakers are also deep in crisis. Hardly a day passes without a small or medium supplier declaring bankruptcy or halting production. Added to this is the introduction of artificial intelligence, which is destroying countless jobs in administration and services.

Stock markets explode

So far, the government relies primarily on the trade unions to suppress resistance to the job destruction and social cuts. Their well-paid officials and full-time works council representatives draw up redundancy plans and suffocate every opposition to them. They present job and wage cuts as being necessary to keep German companies “competitive” in the global market.

But their lie that workers and bosses are “in the same boat” becomes more transparent by the day. While workers’ living standards have stagnated or fallen for years, stock prices, great fortunes and executive pay have exploded.

Despite a stagnating economy and numerous bankruptcies, Germany’s DAX index has hovered around a record 24,000 points since June—more than double its level in 2020 at the height of the pandemic. The total market value of the 40 companies listed in the DAX is nearly €2 trillion.

Stock prices remain high despite the economic crisis because speculators trust that the state will “bail them out” in any future financial crash, just as in 2007. Since then, virtually all wealth gains in Germany have gone to the richest layers. The number of billionaires has quadrupled from 42 to 171. Ten percent of households now own 56 percent of total wealth.

At the same time, poverty is rising. In 2024, 15.5 percent of the population—or around 13 million people—were poor. Among young people aged 18 to 24, the rate was 25 percent.

It is only a matter of time before these social contradictions explode. This is the real reason for Merz’s turn toward the AfD. Around the world, the representatives of capital are turning to authoritarian and fascistic forms of rule as social tensions intensify. The same applies to Italy and France, and is seen most starkly in the United States, where Trump is establishing a presidential dictatorship based on fascist forces. The Democrats offer no resistance because they represent the same capitalist interests.

Germany’s ruling elite regards the US with a mix of fear and admiration—fear of Trump’s trade war measures, admiration for his iron hand against workers, migrants and the left. This holds true not only for Merz and the CDU, but also for Klingbeil and the SPD.

German government attacks the welfare state: Basic support payments to be abolished

Marianne Arens

German Chancellor Friedrich Merz attends the cabinet meeting at the chancellery in Berlin, Germany, Wednesday, Sept. 10, 2025. [AP Photo/Markus Schreiber]

On October 8, the coalition committee of the Merz-Klingbeil Christian Democrat/Social Democrat government abolished Bürgergeld (“Citizens’ Income” basic welfare payments). The decision reveals the true character of this government, which is preparing for war abroad and class war at home. As early as August, Chancellor Friedrich Merz (Christian Democratic Union—CDU) declared, “We can no longer afford the welfare state.”

With the new, harsh rules for basic social security, the Ministry of Labour and Social Affairs, led by the Social Democratic Party (SPD), is now directly following the dictates of the far-right Alternative for Germany (AfD). On September 24, AfD leader Alice Weidel had ranted in the Bundestag (parliament) that Bürgergeld had “degenerated into immigrant money, the costs of which are completely out of control.” It was, she said, “a self-service shop in which freeloaders can enrich themselves without shame.” She shrieked: “Abolish Bürgergeld once and for all!”

The government has now complied. “Bürgergeld is history,” declared Christian Social Union (CSU) leader Markus Söder at a federal press conference on Thursday morning. Chancellor Merz confirmed that “the chapter of Bürgergeld is thereby closed.” The federal minister for labour and social affairs, Bärbel Bas (SPD), announced: “We are tightening sanctions to the limits of what is constitutionally permissible.”

Yet the very measures the coalition has now adopted—complete withdrawal of benefits as punishment—were long considered unconstitutional. When asked about this at the press conference, Bas replied: “For those refusing appointments, there will now be a cascade of sanctions that ultimately reduces benefits to zero. … We are firmly convinced that this complies with the constitution.” Merz explained how this works: anyone receiving social benefits who misses a first and second appointment will have their already meagre payments (€563 per month) cut by 30 percent. If they miss a third appointment, all payments will cease.

The 5.5 million people receiving basic social assistance, who are now being put under such pressure, also face benefit cuts. Despite rising prices, they will have to expect a freeze next year. Pensioners dependent on supplementary benefits will also be affected. With all these measures, the government expects savings of up to €5 billion.

At the same time, Merz is handing out tax gifts to shareholders and business owners. He plans to gradually reduce the corporation tax rate paid by companies, limited partnerships and joint-stock firms from the current 15 percent to 10 percent by 2029. In the post-war decades, this rate once stood at 65 percent. “We will have the lowest corporation tax rate ever,” the chancellor promised in the Bundestag September 24. This alone will deprive the federal budget of €46 billion over five years—two-thirds of which will go to those already earning more than €180,000 a year.

Very different treatment awaits those living on the edge of poverty. Bas made it clear at the press conference that the government intends to coerce the unemployed into accepting any kind of work. “We can only save money if we focus on work,” she said. “If we get 100,000 people out of Bürgergeld and into jobs, we will save about one billion euros.”

Given the ongoing mass layoffs in Germany, this is an unmistakable threat. At a time when hundreds of thousands of workers in the car and supplier industries are losing their secure, decently paid jobs, men and women who have worked in industry for decades are now to be forced—after a short period of unemployment—into any available low-paid job.

In March 2024, 10,000 employees demonstrated against layoffs in front of the Bosch headquarters in Gerlingen near Stuttgart

The attack on Bürgergeld is part of a budget that allocates billions for rearmament and war. The federal budget, which rose from €476.8 billion in 2024 to €502.5 billion this year, will increase again next year to €520.5 billion. Added to this are annual allocations from the “special funds” for the Bundeswehr (Armed Forces) and infrastructure to improve Germany’s “readiness for war”, allowing borrowing of up to €1 trillion. Including these special funds, total federal expenditures will exceed €600 billion in 2026—an increase of nearly 26 percent over 2024. Most of this money is going to the military.

The defence budget is the only one seeing massive growth: the Bundeswehr will receive €82.7 billion next year—€20 billion more than this year. Including allocations from the special fund (over €80 billion this year), the total will exceed €108 billion. Compared with the 2015 defence budget (€33 billion), this figure has tripled. By 2029, the defence budget is to rise to €153 billion (3.5 percent of GDP), and in the following years to 5 percent of GDP.

Meanwhile, more and more of the announced “investments” are being channeled into the transformation of society toward a war economy. Entire production sites—such as VW Osnabrück and Alstom in Görlitz—are converting to arms manufacturing with state subsidies. The special infrastructure fund is also not primarily used to renovate decaying schools, hospitals, care homes or public transport but to build war-ready roads, bridges, motorways and communication systems for conducting surveillance at home and abroad.

Chancellor Friedrich Merz at the formation ceremony of the Bundeswehr tank brigade in Lithuania [Photo by Bundesregierug / Guido Bergman]

To finance this war budget, the government is taking on a colossal mountain of debt. To fund the special budgets, it plans to borrow €170 billion annually until 2029. Over five years, this means €850 billion in new debt, raising total public debt to €2.7 trillion.

Merz’s commitment to rearmament—his “whatever it takes” pledge—means that an ever-growing share of the federal budget will flow to the banks as interest and debt repayments. By 2029, these payments will amount to €66.5 billion—and could rise to €100 billion, according to the German Taxpayers’ Association, which warns of Germany’s declining credit rating on global markets.

Defending his policy in the Bundestag September 23, Merz declared: “We face one of the most challenging phases in modern history … Foreign and domestic policy can no longer be separated.” Workers, he insisted, must finally understand that they will bear the cost of rearmament and debt. “We need a national understanding of the inevitability of change,” said Merz.

This attack on Bürgergeld marks a clear signal for a frontal assault on all social achievements won over decades. The government is proceeding step by step against the poorest and most defenceless. Back in May, Interior Minister Alexander Dobrindt (CSU) had halted family reunification for refugees and, with SPD backing, ramped up deportations.

The World Socialist Web Site warned at the time that this was merely the prelude to attacks on all workers. This has now been confirmed. Discussions are already underway about abolishing “Care Level One” payments, introduced in 2017, which would affect 5.7 million people in need of care—865,000 of whom would lose all benefits.

The government has long viewed the federal pension subsidies—comprising about 70 percent of the Labour and Social Affairs budget—as a prime target. For now, only the so-called “active pension” has been introduced: starting next year, retirees who continue to work can earn up to €2,000 tax-free. A broader assault on the pension system has been outsourced by Vice Chancellor Lars Klingbeil (SPD) to an expert commission, which is to present recommendations by early 2027.

Not a single party, from the AfD to the Left Party, has questioned the federal budget or its basic premise: that Germany must become a major military power again and be “fit for war” against Russia by 2029. The “special funds” worth over €1 trillion were made possible only thanks to the active support of the pro-war Greens. The Left Party approved these plans in the Bundesrat (upper chamber of parliament) and has since backed their implementation in parliamentary committees. It also paved the way for Merz’s swift election as chancellor.

The social cutbacks and massive state debt differ little from the conditions that have already led to repeated government crises and mass protests in France. A similar revolutionary situation is rapidly developing in Germany.

Anger in the working class over these social attacks is immense, but it has no political voice, as the trade unions are tightly bound to the SPD, in government with the Christian Democrats, and integrated into German corporate structures. This close collaboration was again demonstrated on Thursday, immediately after the press conference, when IG Metall union chair Christiane Benner met with government representatives and industry leaders at the “auto summit.”