Argentina’s primary elections indicate a difficult future for Fernández

Argentina's President Alberto Fernández votes in the nationwide legislative primary on Sunday, September 12

Argentina’s President Alberto Fernández votes in the nationwide legislative primary on Sunday, September 12| Photo: EFE/ Presidency of Argentina/ Esteban Collazo

A “hurricane” swept through Argentine politics, as analysts in the local press described it. The government of President Alberto Fernández and his deputy, Cristina Kirchner, suffered a defeat in the primary elections on Sunday (12), which precede the parliamentary elections in November, which take place in the middle of the presidential term.

In the so-called PASO, Primary, Open, Simultaneous and Mandatory elections, the candidates who will run in the November 14 elections were defined, to renew half of the Chamber of Deputies and a third of the Senate. The vote is seen as a thermometer of the popularity of the Fernández government, which has faced criticism about the fight against the pandemic and the management of the crisis that the country has faced for years.

Candidates from the ruling left-wing Frente de Todos coalition lost popularity, and the opposition of Juntos por el Cambio, the alliance of former president Mauricion Macri, took the lead with 40% of the vote in the national count.

The lists of pre-candidate for deputies presented by the government ticket were defeated in 18 of the 24 Argentine provinces, including electoral strongholds of Fernández and Kirchner, such as the province of Buenos Aires. Senators were only the most voted in two of the eight provinces that will elect representatives to the Senate.

The results indicate the possibility of the government losing the majority in the Senate and the position of the largest minority in the Chamber of Deputies.

Fernández had his image damaged by the release of images that show him celebrating the first lady’s birthday in the official residence, with guests, while the Argentines were forced to stay at home, at the height of the quarantine imposed to contain Covid-19.

This was just the latest chapter in a series of crises that include recession, rising inflation and rising poverty.

“The ruling party lost 1.2 million votes in comparison [à eleição presidencial de] 2019; this brings them to a level that, if repeated in November, leaves Alberto Fernández very weakened,” Mariel Fornoni, director of an Argentine consulting firm, told Reuters.

“Obviously we didn’t do some things well because people didn’t follow us as we would have liked,” Fernández said after partial release of the results, vowing to learn from his mistakes. “The campaign has just started and, in November, we will have to win it, because we have a commitment to Argentina.”

Market reacts positively

The market reacted positively on Monday to the Argentine government’s defeat in Sunday’s primary elections, with rises of up to 18% in Argentine shares listed on Wall Street before the opening of the Buenos Aires Stock Exchange, whose main index opened in an increase of 10.51%, while the country risk fell 6%.

“The market reaction is favourable,” said a report by fund manager SBS, with Argentine equity ADRs up nearly 18% pre-opening. The country risk, measured by the American bank JP Morgan, fell more than 6%, piercing the 1,500 points to 1,448.

The benchmark S&P Merval index of the main shares of the Buenos Aires stock exchange rose 10.51% at the opening, to 83,878.62 points. This is the opposite effect to what occurred after the 2019 presidential candidates’ primaries, when the market anticipated a victory for then-president Mauricio Macri (2015-2019), who ended up being defeated by the current president, Alberto Fernández.

“The result was surprisingly satisfactory for the market. This victory in the primary elections is far from solving the problems in which the country is immersed, but given the magnitude, it will offer a balm for future expectations because it will not only limit the strength of the ruling coalition, but it will also open up the possibility of a management change in 2023,” says a report by Portfolio Personal Inversiones.