Global lessons from the Spanish and Argentine models

Pedro Sánchez and Javier Milei did not meet at MetLife Stadium. The Spanish Prime Minister only decided in the last few days to travel to New York to watch yesterday’s match, despite having an official meeting scheduled for today in Algeria; whilst the Argentine President decided to stay in Buenos Aires for good luck: he watched the final from the Quinta de Olivos wearing a tracksuit from YPF, the Argentine oil company, just as he had done for all the previous World Cup matches. And perhaps it is just as well, given the hostile relations between the two heads of government. Two years ago, diplomatic relations between the two countries had hit one of their lowest points since the War of Independence: Milei, invited to a political meeting in Spain by Vox, the far-right party, had described Sánchez’s wife (now facing trial for influence-peddling) as ‘corrupt’, and the Spanish government had reacted by recalling its ambassador from Buenos Aires. However, in the preceding weeks, several ministers in Sánchez’s government had described the Argentine president as being under the influence of “substances”, a “hate-monger” and “authoritarian”.

Yesterday’s final was therefore also a clash between two leaderships at opposite ends of the political spectrum, both of which have become global benchmarks – one for the right and the other for the left.

Madrid and Buenos Aires are also two success stories in terms of economic growth. Both are recording growth rates significantly higher than those of their respective regions. Spain saw growth of 2.8 per cent in 2025, which, according to IMF projections, will be 2.1 per cent this year and 1.8 per cent in 2027: a rate that any major European country can only dream of. Argentina saw its GDP grow by 4.4 per cent in 2025 and, again according to the IMF, the trend is set to continue with growth of 3.5 per cent this year and 4 per cent in 2027: three consecutive years of growth are an exception for a country that holds the global record for the number of years spent in recession (one in three over the last 75 years). Both Spain and Argentina are due to hold elections next year and, with these figures, neither government should face any problems securing re-election. Yet both Sánchez and Milei are struggling to win public support for reasons that are, in some respects, similar. On the one hand, economic growth that has not trickled down to the wider population; on the other, cases of corruption, which are fuelling voter dissatisfaction.

In Spain, for example, economic growth is more quantitative than qualitative: the pie is growing mainly due to the rise in the number of people in work, driven by the strong influx of immigrants (particularly from Latin America), but the individual slices remain essentially the same. In fact, they are shrinking slightly. Not only are gross wages stagnant, but net wages have lost purchasing power due to the fiscal drag that the socialist government has failed to redistribute. Furthermore, the strong population growth driven by immigration and tourism has put pressure on the property market, causing house prices to skyrocket – which is the real national emergency, particularly for young people. Furthermore, growth based on sectors such as renewable energy, tourism and low-value-added services has been concentrated in a few geographical areas, revealing a two-speed economy: a vanguard of expanding cities and tourist areas, and the rest of the country struggling to keep up.

A situation that is in some ways similar, albeit in a completely different macroeconomic context, is that of Argentina. Milei was elected with a clear mandate: to crush inflation, in a country where prices were rising by 12 per cent in a month and by over 200 per cent in a year. The government’s shock therapy consisted, on the fiscal front, of a 30 per cent cut in public spending to immediately achieve a balanced budget and halt the Central Bank’s monetisation of the deficit – which had been the driving force behind inflation; on the structural reforms front, it involved opening up the economy by cutting red tape and reducing tariffs. The shift in macroeconomic policy involves focusing on sectors where Argentina has a competitive advantage, such as energy production, raw materials extraction and agriculture, at the expense of the protected, subsidised and unproductive industrial sector. This turnaround has enabled the country to grow, reduce inflation, and restore balance to its public finances and external position. However, the problem is that the sectors experiencing the strongest growth are those with the fewest employees, whilst those in decline – such as construction and the textile industry – are labour-intensive. This process of transformation has therefore led to a deterioration in the quality of employment, with many people moving from formal jobs in the old, protected industries to informal work or platform-based employment. Moreover, in Argentina’s case too, this two-speed growth is geographically uneven: there is a boom in the inland regions or those along the Cordillera – which are, however, the least populated – whilst the province of Buenos Aires, which alone accounts for over a third of the population, is in crisis.

Economic problems are compounded by legal scandals. In Spain, the government is reeling from allegations of corruption and nepotism involving Sánchez’s closest aides and family members: his brother David has just been convicted of winning a rigged tender; his wife, Begoña Gómez, has just been committed for trial for exploiting her role as First Lady; his former minister and right-hand man, José Luis Ábalos, has just been sentenced to 24 years for corruption; and his other right-hand man and former party organisational secretary, Santos Cerdán, has been arrested for corruption. And then there is Zapatero, Sánchez’s political mentor, accused of influence peddling, in whose safe jewellery worth 1.3 million euros – which had not been declared to the tax authorities – was found, the origin of which he has not yet been able to explain.

Recently, at the end of June, Milei took a dig at Zapatero over the jewellery issue during an event in Spain. But it was precisely during those days that the final chapter of a corruption scandal was unfolding, one which has eroded much of the Argentine government’s political capital: the investigation into illicit enrichment targeting the chief of staff and government spokesperson, Manuel Adorni, who justified his expenditure – which far exceeded his income – by claiming to have found 500,000 euros’ worth of Bitcoin on a USB stick. Milei defended his friend and colleague to the bitter end, but Adorni was forced to resign following a steady stream of revelations about his lifestyle that caused the government’s approval ratings to plummet.

The polls are not looking very favourable for either of them. Sánchez’s situation is more complicated, given that all the polls suggest an overwhelming majority for the centre-right alliance between the PP and Vox. Milei’s prospects are more uncertain, partly due to his rise in the polls in recent months following a long period of decline, and above all because of the disastrous state of the Peronist opposition. For both, victory in the World Cup was seen as a boost to their popularity that would increase their chances of re-election. Past experience shows that this does not amount to much. A few months after Spain’s victory at the 2010 World Cup in South Africa, the Zapatero government was overwhelmed by the economic crisis and forced to call a snap election, which in 2011 resulted in a landslide victory for Mariano Rajoy of the People’s Party. The same applies to Argentina. The triumph in Qatar in December 2022, 36 years after Mexico ’86, did nothing to turn the fortunes of Alberto Fernández’s unpopular government around: eight months later, in August 2023, the libertarian outsider Javier Milei pulled off a surprise victory in the PASO (open, simultaneous and compulsory primary) and then, in November, won the run-off against Peronism. Voters do not decide based on their national team’s shirt, but on their wallets. For Sánchez and Milei, the 2027 election will be played out on a different pitch: that of the economy.