President Alberto Fernández’s centre-left coalition was on track to lose its senate majority in midterm elections, as Argentines punished his Peronist party in the face of spiralling inflation and rising poverty.
Together for Change, the conservative opposition coalition, was narrowly ahead in most races nationwide in initial results in elections on Sunday for half of the lower house and one-third of the Senate. This included an important lower-house contest in Buenos Aires province, home to nearly 40 per cent of the electorate and a traditional Peronist stronghold.
A defeat in the Senate would complicate the government’s position and probably consign the president “to lame duck status”, said Jimena Blanco, Americas director at Verisk Maplecroft, a risk consultancy. She added that a loss would represent “an unprecedented position of weakness”.
Fernández insisted in a television address that this was “the end of a very difficult period” for Argentina after the country endured one of the world’s longest lockdowns that has crippled the economy. The president vowed to present an economic plan to congress in the first week of December and reach a “sustainable” agreement with the IMF on rescheduling $44bn of debt, most of which comes due for payment next year and in 2023.
“In this new stage, we will deepen our efforts to reach a sustainable agreement with the IMF. We must clear the uncertainties that come with this sort of unsustainable debt,” Fernández said.
Inflation is running at an annual rate of 52.1 per cent, according to the latest official data, and 40.6 per cent of people were living in poverty in the first half of 2021, up from 35 per cent when Fernández took office.
Cristina Fernández de Kirchner, a towering Peronist figure who served as president from 2007 to 2015, was notably absent on Sunday night. Kirchner is vice-president in the current administration and announced she would not be making an appearance for health reasons after early exit polls showed signs of a centre-left defeat, including in her family’s political stronghold of Santa Cruz province.
Ignacio Labaqui, a senior analyst at Medley Global Advisors, said the most important question facing Fernández was if he would “address the deep imbalances that the Argentine economy faces”. This included whether the government would deal with high state subsidies and a fiscal deficit financed by printing money or carry on for two more years without addressing the underlying economic challenges.
The midterms are seen as an early indication of the opposition’s strength as it gears up for a presidential race in 2023. The dire state of the economy has also weakened the two-party system and led to a surge in support for more extreme candidates.
One standout performance in the city of Buenos Aires was Javier Milei, a 51-year-old outsider who secured 17 per cent of the vote and is likely to secure two congressional seats for the Freedom Moves Forward coalition.
A self-styled “dynamic anarcho-capitalist”, Milei chose a famous music venue on Sunday to welcome thousands of his supporters as the results were announced.
Milei’s libertarian platform includes abolishing the central bank, free love and breaking up the “caste system” in Argentine politics.
“Help me change this country,” he called from the main stage to raucous applause at Luna Park Stadium.
Allies of Horacio Rodríguez Larreta, the popular Buenos Aires city mayor, won races in the capital and the surrounding Buenos Aires province that he hopes will make him favourite to lead the opposition in 2023.
Source: Economy - ft.com
