(MENAFN- The Rio Times) In the heart of Buenos Aires, on October 30, 2025, President Javier Milei-a bold libertarian economist turned leader-hosted a landmark gathering at the presidential palace.

Fresh from his party's triumph in midterm elections, where they captured 41% of the vote and expanded their congressional seats, Milei invited 20 of Argentina's 24 provincial governors to forge alliances.

This move marked a strategic pivot from his initial "chainsaw" approach to governance, slashing public spending to tame rampant inflation.

Since assuming office in December 2023, Milei has battled Argentina's chronic woes: a history of defaults, hyperinflation peaking above 200%, and poverty now affecting 53% of its 46 million people.

His conservative policies have halved inflation to around 100% by mid-2025, achieving a zero fiscal deficit through deep cuts-7% of GDP nationally, plus provincial contributions.



Yet, without a congressional majority, he's relied on decrees, facing resistance from entrenched leftist forces. Here's the deeper layer: Argentina's federal system empowers governors immensely.
Milei courts governors to unlock reforms and stabilize Argentina
They control vast resources, influence senators and deputies (with provinces like Buenos Aires holding 40% of the population), and rely on federal tax shares for up to 70% of their budgets.

No president rules alone; governors can block or broker national laws on budgets, taxes, and labor. Milei's agenda-modernizing rigid labor laws, axing burdensome taxes, and bolstering property rights-needs their nod to succeed, especially after U.S. President Donald Trump's $20 billion aid package demanded broader consensus.

The meeting, lasting over two hours, saw Milei, flanked by his cabinet and sister-advisor Karina, strike an affable tone. Governors agreed on fiscal restraint but demanded resumed infrastructure and fairer revenue splits.

Absent were four Peronist holdouts, including Buenos Aires' Axel Kicillof, whose socialist-leaning policies Milei blames for perpetuating economic stagnation. Kicillof called it a "photo-op" for Trump.

For outsiders, this reveals Argentina's fragile balance: conservative innovation clashing with outdated interventionism. Success could spark growth; failure, more turmoil. As expats watch, it underscores why understanding provincial power is key to grasping Latin America's giant.

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