Analysis-Argentina primary defeat puts Peronists in difficult position on policy

Argentines vote in primary legislative elections, in Buenos Aires
Voting in the primary legislative elections in Buenos Aires, Argentina
FILE PHOTO: A man casts his vote at a polling station during the primary legislative elections in Buenos Aires, Argentina September 12, 2021. Reuters/Augustin Markarian

September 13, 2021

Nicholas Misculin. By

Buenos Aires (Reuters) – Argentina’s Peronists are stuck between a rock and a hard place after a crushing defeat in Sunday’s midterm congressional primary: shift center to win back crossover voters or populists to set base on fire. Double down on policies.

Sunday’s vote,, is effectively a dry run before the November 14 midterm In what may have been a swinging balance of power in Congress, the business-friendly opposition strongly benefited against the centre-left government, whose popularity has been battered by the pandemic.

With legislature control at stake, there is a chance that electoral losses could prompt the government to take short-term measures to revive its popularity ahead of November’s vote, pumping growth already at risk of overheating. Open the Expenses tap for Inflation.

“Following the results is the threat of radicalization … not only from an economic point of view but also from a political point of view,” said Gustavo Ber, an economist at Estudio Ber in Buenos Aires.

However, most analysts said the government was more likely to moderate its position, take the angry voices of voters on board, and potentially struggle with a weak position in the legislature if it loses a Senate majority. .

“If the voter turns to the right, it makes no sense for the government to turn to the left,” said political analyst Sergio Berensztyn.

A government source told Reuters that discussions were underway within the ruling Front for All Peronist coalition about the best way forward.

“This debate is happening within the government. The government does not intend to radicalise, it will not happen. I don’t know if there is room for a new bet (from medium),” the source said, asking not to be named.

Front for All won about 30% of Sunday’s vote, while some 38% for the centre-right coalition Together for Change. It was defeated in its major stronghold of the province of Buenos Aires, which surrounds the capital.

Analysts say the ruling party will lose control of its dominant minority position in the Senate and lower Chamber of Deputies if the results of the primaries are repeated in a November midterm vote.

President Alberto Fernandez will now face a tug of war within his own party. He represents the liberal wing of the Peronists, while a more militant wing is clustered around vice president – ​​and former two-term president – ​​Cristina Fernández de Kirchner.

Argentine markets cheered for election results on Monday, as investors hoped a weak government would be forced to soften its stance to keep an eye on presidential elections in 2023.

Goldman Sachs analyst Alberto Ramos said in a note, “There is a risk of slight changes to more heterogeneous, interventionist and populist policies in an effort to rebuild political support in the short term.”

“But officials are also aware that a significant hardening of asymmetrical policies could further damage the economy and therefore fail to pay political dividends in 2023.”

(Reporting by Nicholas Miscullin; Additional reporting by Walter Bianchi, Jorge Otaola and Hernan Nessie; Editing by Adam Jordan and Rosalba O’Brien)


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