BUENOS AIRES (Reuters) – Argentina’s libertarian President Javier Milei is set to sign a long-delayed pact with provincial governors in a bid to consolidate wider support for his reforms and bolster his government that has only a minority in Congress.
Milei will sign around midnight a deal with at least 17 governors from across the South American country in a bid to battle market doubts about his ability to weather the country’s worst economic crisis in decades, which has seen inflation near 300% and half of Argentines slip into poverty.
Following the initial strong market rally after Milei took office in December, bonds and the peso currency have come under renewed pressure as the economy has slid into recession and political tensions have bubbled up domestically and overseas.
Lacking a parliamentary majority and with no provincial governors, Milei’s La Libertad Avanza party needs to bargain with other political forces in order to carry out its program.
He has built a close alliance with the main conservative bloc, though five governors from the center-left Peronist opposition are expected to miss the meeting.
Presidential spokesman Manuel Adorni in a posting on X said the pact would include non-negotiable fiscal balance, cuts to public spending, lower taxes, pension and labor reforms, commitment to exploiting natural resources and an “opening to international trade.”
Argentine lawmakers at the end of June passed two expansive laws backed by Milei’s administration aimed at kickstarting the economy, slashing public spending and attracting international investors, but markets have fallen back in the last week.
On Monday, the peso weakened some 2% in the country’s parallel informal market, hitting a record low of 1,450 pesos per U.S. dollar.
The agreement known as the “May Pact” – initially set to be signed on May 25 but which was delayed – refers to the date of Argentina’s May Revolution against the Spanish. It will be signed in the northern province of Tucuman, a symbolic location where Argentina declared its independence in 1816.
(Reporting by Nicolas Misculin; Writing by Sarah Morland; Editing by Bill Berkrot)
