Closest confidants under suspicion Corruption allegations put "chainsaw" Milei under pressure

President Milei is facing a corruption scandal involving his closest confidants and severely damaging his popularity ahead of the elections.

In addition to the overly large state apparatus, President Javier Milei believes that corruption is one of Argentina's ills that he wants to eliminate. Many of his voters expect him to be successful on this front too.

However, the inner circle around the president, who became famous for his chainsaw appearances, is now under serious suspicion of nepotism.

His sister Karina and two other close associates are allegedly involved in bribes in the healthcare sector, as reported by the NZZ and news agencies. Karina Milei is the secretary general of the president's La Libertad Avanza party and, according to observers, runs it with an iron hand. She is also a central figure in his anti-corruption campaign.

The allegations concern payments made by private pharmaceutical wholesalers and pharmacy chains to members of the government in order to secure state contracts. The company Suizo Argentina SA in particular is in the spotlight, as its turnover has increased considerably under Milei's presidency.

There is still no definitive evidence. The fact that President Milei only commented on the allegations four days after they were made public has exacerbated the situation.

Growing unrest and political challenges

At a campaign event regarding the parliamentary elections in the province of Buenos Aires, opponents pelted his convoy with stones. Bodyguards had to take Karina and Javier Milei to safety.

The province around the capital is a stronghold of the opposition Peronists. The results of tomorrow's elections are seen as an important test of public opinion. The national congressional elections will take place in October.

Milei's party has a clear minority in both chambers of parliament (11 and 15 percent respectively), which is why he cannot implement his radical reforms as freely as he would like. Congress is now in the process of abolishing Milei's most important government instrument, the emergency decree. This would make it difficult for him to implement his plans against the will of the legislature.

The allegations of corruption are now also reducing the confidence of voters in their president, who have supported him to date. This is shown by the Torcuato Di Tella University index, writes the NZZ. The value dropped significantly in August.

Economic confidence is also waning

The political uncertainty also has economic consequences. The risk premiums for Argentinian bonds have risen and the peso has lost value against the dollar. The stock market index recorded a fall of 14 percent in August. These developments reflect the dwindling confidence of investors in Milei's ability to stabilize the economy.

Despite these challenges, Milei has achieved success in fighting inflation and in the national budget. Monthly inflation remained below 2 percent for three months in a row. Over the year as a whole - as inflation is usually measured - the figure is still 36 percent. Milei can chalk up the fact that Argentina has achieved a budget surplus as a success.

However, one of the things that has cost him popularity is austerity measures in government sectors such as pensions, healthcare and infrastructure.

Milei's aggressive rhetoric towards opponents and potential allies also makes it difficult for him to expand his political alliance. Two years after his triumphant election victory, it is becoming increasingly difficult for the chainsaw president to reshape Argentina in line with his libertarian convictions.

A corruption scandal in his closest circle is certainly the last thing he needs.