Argentine President Cristina Fernandez de Kirchner may lose control of Congress in today’s mid-term election after confidence in the government shattered on her handling of a farmers’ strike last year.
Fernandez’s Victory Front coalition is set to lose as many as 18 seats in the 257-member lower house, leaving her bloc with 98 deputies and not enough allies to form a majority, said Rosendo Fraga, a pollster in Buenos Aires. The coalition will probably drop four seats in the 72-member Senate, holding nto 36, Fraga said.
“The farm conflict has been decisive in the loss of votes for Fernandez’s coalition,” Fraga said. “The decline in those planning to vote for the government corresponds exactly to the map of the dispute with the farmers.”
Half of the lower house and a third of the Senate is up for election. Today’s vote marks the first electoral test of Fernandez’s strength since she took office in December 2007 on a pledge to maintain the economic policies of her husband and predecessor Nestor Kirchner, 59.
Should she lose control of Congress, Fernandez may be forced to cut agricultural export taxes even as revenue dwindles and spending grows, said Carola Sandy, an economist at Credit Suisse Group AG in New York. New measures that affect private property rights would also be unlikely, Barclays Capital said in a report last week.
Government Takeovers
Opposition leaders, including Buenos Aires Mayor Mauricio Macri, have said they favor returning to private hands the country’s biggest airline and about $24 billion in pension funds that Fernandez nationalized last year.
The ruling party has lost seats in three of the past five mid-term elections, and twice the loss set off an economic and governmental crisis, Fraga told reporters on June 18.
“Everything she promised was swept under the carpet,” said Graciela Romer, who runs polling company Graciela Romer & Asociados in Buenos Aires. “Fernandez turned into a big disappointment after the expectations people had.”
Last year, Fernandez’s first in office, economic growth slowed to 6.8 percent from an annual average of 8.8 percent during Kirchner’s four-year term. Inflation quickened to what private economists such as Jose Luis Blanco, at Tendencias Economicas research, estimate at 22 percent.
Fernandez, 56, has failed to restore credibility to the country’s statistics agency or reach an accord with holders of about $20 billion in defaulted bonds dating from the country’s 2001 financial crisis, leaving Argentina without access to international debt markets.
Plunge in Popularity
Six months after her inauguration her popularity plunged from 51 percent to 20 percent, according to Poliarquia Consultores, a Buenos Aires polling company. The key reason, pollsters say, was a four-month protest by farmers opposed to her planned increase in export taxes, which led to food shortages and higher consumer prices.
“The farm crisis has been very important in costing Fernandez support from key groups that voted for her,” said Daniel Kerner, a political analyst at the Eurasia Group in New York. “The government has been unwilling to compromise, so we may face a complicated political process ahead.”
Kirchner leads a list of congressional candidates for the ruling coalition in Buenos Aires province, which accounts for 38 percent of the national vote.
“We are optimistic,” Kirchner told reporters today after voting in Buenos Aires. “Argentina is in a decisive moment to consolidate the change in the country.”
Romer’s latest poll showed Kirchner backed by 24.7 percent of voters, followed by former supermarket magnate Francisco de Narvaez with 20.7 percent. The poll of 987 people, released on June 19, had a margin of error of 3.1 percentage points. In Argentina, the number of candidates who win on a slate is proportional to the votes the ticket receives.
‘Sense of Balance’
“The good news for Argentina and the world is that the Kirchners won’t control Congress any more,” De Narvaez, 55, told reporters on June 18. “There will be a sense of balance that’s really needed in Argentina.”
Fernandez used her dominance of Congress to nationalize the private pension funds and to take over Aerolineas Argentinas SA. She said the measures were an effort to extend economic policies of Kirchner’s that helped spur six straight years of growth.
Kirchner warned in his campaign that should his coalition lose, the government won’t be able to mitigate the impact of the global financial crisis by intervening in the economy.
He has reminded voters that in 2001, when Argentina defaulted on $95 billion of debt and restricted bank withdrawals, then-President Fernando de la Rua was forced to resign amid riots and supermarket lootings. The following year, the economy shrank almost 11 percent.
“This is not just another legislative election, there are two different models for the country at stake,” Kirchner said in a rally on June 17. “We don’t want more frozen bank accounts, more financial instability, more unemployed people, more broken industries. This economic model should be a breaking point between the old Argentina and the new one.”
About 27.8 million people in 24 provinces are eligible to vote. Polls close at 6 p.m. (5 p.m. New York time.)
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