On August 13, the open, simultaneous and mandatory primary elections (PASO) were held in Argentina, where the list of candidates representing each party was defined. In the PASO, there were three main political parties, each with candidates with markedly different profiles.

The ruling party Unión por la Patria, represented by Sergio Massa, current Minister of Economy, with a socialist profile and once viewed with sympathy by the market, is in the midst of an inflationary process that is destroying what little credibility was left in the current government. On the other hand, there is the Juntos por el Cambio (Together for Change) party, which was the historic rival of the ruling party. Horacio Rodríguez Larreta, also with a social democratic profile, and Patricia Bullrich -with pro-market ideas, reduction of public spending, and greater emphasis on security- who played a good role as Minister of Security in the Macri era, competed in this party. Finally, for the "La Libertad Avanza" party, Javier Milei, self-defined as a liberal-libertarian, whose most outstanding proposal is the free competition of currencies (probably dollarization), with the eventual closing of the Central Bank.

No pollster anticipated the triumph of La Libertad Avanza, where Javier Milei obtained 30.04%, when they predicted a third place. He was followed by Patricia Bullrich, of Juntos por el Cambio, who obtained 28%, and Sergio Massa for Unión por la Patria, who obtained 27.27%. Thus, these primaries became the worst election in the history of Peronism, which is not minor and could mean a change of era for the country.

The general election will be held next October 22, and in order to win the presidency, a number higher than 45% or 40% with a minimum difference of 10% with respect to the second force is required. Otherwise, it will be defined in a ballot on November 19. In this scenario, there are two questions to be asked: what are the possibilities of each candidate and what can be expected in the future in case one or the other wins.

In order to answer the first question, we must take into account that Milei got 7 million votes and it is likely that, under the "triumphalist contagion" effect, he will manage to capture some of the 10 million votes distributed among those who voted blank or did not participate at all. votes or those who did not participate at all.

On the other hand, it is more complex to predict who may win the election in case the dispute is between Patricia Bullrich and Sergio Massa. The candidate of Juntos por el Cambio obtained individually 4 million votes and should capture a high percentage of the 2.7 million that belong to her rival of the same political space, Horacio Rodríguez Larreta.

Despite the poor performance of Sergio Massa, who obtained 5 million votes, it is feasible that he will reap another percentage of undecided voters who voted for Rodríguez Larreta, so it is not clear who will have the advantage.

In conclusion, Argentina's political landscape is in a moment of uncertainty and transition. Each candidate offers a different path for the country. If Massa wins, the situation will probably not change much, with a country closed to trade, elephantine public spending, nothing for the private sector and a divided Congress. If Bullrich wins, we will see a more radical change than with Macri. Having learned the lesson that gradual adjustments do not work, there would be economic openness, Central Bank independence and greater market confidence. Being a consolidated party, it offers security in terms of governability and would have support from Milei's party in Congress. In an eventual triumph of Milei, who is questioned for his lack of team and trajectory, he should also have Bullrich's support for the reforms, besides the fact that he is gathering very serious people in his team (such as the economist Carlos Rodríguez, among others). In short, it is not known who is going to win. The three candidates are evenly matched, but what is clear is that there is a profound change of mentality in society, which demands urgent reforms towards the ideas of freedom.

Pablo Gonella

Money Desk Operator