Austral Insights #16

Welcome to Austral Insights, your go-to source for understanding Argentina's key developments. Each week, we bring you concise, business-focused insights into the country’s politics, economy, and strategic sectors—providing the local perspective you need to make informed decisions.

Argentina by the numbers:

*_{Emerging Markets Bond Index (JP Morgan)}
**_{The S&P MERVAL Index tracks the largest, most liquid stocks on Argentina’s exchange, meeting size and liquidity requirements}

This week’s highlights:

• Cristina Kirchner’s corruption conviction upheld, meaning a lifetime ban from political office.

• YPF‑ENI partnership launches next phase of "Argentina LNG" using floating export units.

• Inside Congress: The Libra cryptoscandal commission moves forward by summoning President Milei and his sister, while opposition pushes for impeachment.

• What do Argentines think about..? A pre-ruling poll shows Milei leading in approval and La Libertad Avanza as the frontrunner for the October midterms, while CFK and Kicillof’s ratings decline. How will opinion shift after the Supreme Court’s ruling?

Politics

Argentina’s Supreme Court has upheld the corruption conviction of former President Cristina Fernández de Kirchner (CFK), confirming a six-year prison sentence and a lifetime ban from political office. The ruling rejects her appeal over fraudulent awarding of public works contracts. CFK dismissed the verdict as politically motivated, framing it as an attempt to limit the popular vote. The decision means she can no longer run for a provincial legislative seat in Buenos Aires, a race she had recently entered.

What this means:

• Short term, the ruling will sharpen political polarization and strengthen Peronism’s narrative of persecution. This could unite the party as it rallies behind CFK.

• Long term, new leadership questions arise. Buenos Aires governor Axel Kicillof has gained ground through rapprochement with CFK, while figures like Juan Grabois—who was arrested last weekend for protesting against the closure of a Peronist institute—remain possible future contenders.

• For Milei, this may bring an immediate advantage, but a potentially reunified Peronism would force him to recalibrate his strategy ahead of midterms and, especially, the 2027 general elections.

Oil & Gas

During President Milei’s visit to Rome, state-controlled YPF signed a strategic deal with Italy’s ENI to jointly develop a phase of the "Argentina LNG" project. The agreement charts the path to a final investment decision on floating LNG units, with two installations of 6 million tons/year capacity. This project represents a major leap in exporting Vaca Muerta gas to global markets.

Foreign Policy

On June 9 in Paris, President Milei and French President Macron signed a Strategic Alliance on Critical Minerals, focusing heavily on lithium. They also agreed to strengthen nuclear sector cooperation—with France pledging to support Argentina’s nuclear ambitions—and discussed finalizing the disputed Mercosur‑EU trade agreement, especially regarding agricultural provisions.

Election Watch

In Misiones province’s local legislative elections, held this past Sunday:

• Incumbent Peronist coalition Frente Renovador de la Concordia led with 28.6%; La Libertad Avanza claimed 21.9%; local party Unión por la vida y los valores earned 19%.

• As seen in the rest of the provinces that voted this year, voter turnout hit a record low at 55%, signaling growing disconnection between citizenship and politics.

• Provincial incumbents remained in control, but Milei’s La Libertad Avanza emerged as a strong challenger with an 8-month-old party.

Inside Congress

• While the Supreme Court’s ruling against CFK became public, the investigative commission on the $Libra cryptoscandal was holding a session. Once again, the commission failed to reach a consensus on the appointment of its authorities. However, the commission voted to summon President Javier Milei and his sister, Presidential Secretary Karina Milei. Additionally, the opposition formally proposed the impeachment of President Milei in connection with this case.

• Multiple legislative commissions with activities scheduled for June 11 were rescheduled after the Supreme Court’s ruling on Cristina Kirchner

What do Argentines think about…?

The Supreme Court’s ruling on CFK has triggered a political earthquake in Argentina. Its impact on public sentiment remains to be fully measured, but it will be critical to watch in the coming weeks.

In the meantime, the latest Argentina Opina survey (conducted June 2–4) provides a snapshot of public opinion just prior to the ruling. The key takeaways:

• Slight improvements in public perception of President Milei and his administration.

• A decline in public image ratings for Cristina Kirchner and Axel Kicillof.

• La Libertad Avanza emerges as the clear frontrunner for the October midterms.

Public Image Ratings (% Positive / % Negative):

• Javier Milei: 47% / 53% (highest net positive)

• Patricia Bullrich: 46% / 53%

• Victoria Villarruel: 45% / 52%

• Axel Kicillof: 39% / 60%

• Juan Grabois: 36% / 63%

• Cristina Fernández de Kirchner: 35% / 64%

Voting Intentions for October Midterms:

• La Libertad Avanza: 37%

• Peronism/Kirchnerism: 29%

• PRO (Macri's party, expected to align with LLA): 8%

These results offer valuable insight into the political landscape prior to the Court’s decision. How this seismic ruling will reshape public sentiment and voting dynamics remains to be seen, but it is certain to be a major storyline in the run-up to October.

Austral Insights will continue to monitor and analyze the fallout, so stay tuned!

Are you interested in the risks and opportunities that Argentina presents? Is there an issue you’d like to discuss or understand in greater depth? Reach out for a free 30-minute talk at [email protected].

See you next week with more insights!