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Wednesday, October 27, 2010

Death Leaves Argentina's Future Wide Open

Death leaves Argentina’s future wide open
By Jude Webber in Buenos Aires
Published: October 27 2010 14:59 | Last updated: October 27 2010 19:42

Argentinean President Cristina Fernandez and her husband, the former president Nestor Kirchner
The death of Néstor Kirchner, Argentina’s most influential politician, leaves a void at the heart of the presidency of his wife, Cristina Fernández, and a big question mark over the country’s direction.

The Kirchners’ unpopularity with middle-class voters made neither of them a sure-fire bet for victory in presidential elections in October 2011. But one or the other of Argentina’s most powerful political couple since Juan and Evita Perón had been expected to stand, in hopes that the combination of a weak opposition, booming growth and high public spending would carry them through.

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Now, with the death of Mr Kirchner of a heart attack on Wednesday at the age of 60, everything is wide open.

Ms Fernández will receive a massive outpouring of sympathy, but opinion polls showed voters were already weary of the couple’s confrontational style well before Mr Kirchner’s death – which may open the way to a milder candidate like Mr Kirchner’s vice-president, Daniel Scioli, to steer Argentina into a more investor-friendly era.

“This dramatically changes the current political landscape and the outlook for the elections,” said Joaquín Morales Solá, a commentator. “The Kirchner era was over before this . . . I don’t think she can renew a political mandate without her husband. Theirs was a joint project.”

Mr Kirchner’s death offers Ms Fernández an elegant way out if she decides not to stand again in 2011. With no prospect of humiliating defeat, she could wrap up her term as the president who tackled the problem of “holdouts”, creditors still unpaid from Argentina’s 2001 default – a key step towards restoring international respectability. And with the economy expected to grow as much as 8 per cent this year and more than 5 per cent in 2011, and record central bank reserves, she could argue she was leaving Argentina in fine shape – vindication for her husband’s political model.

She may, in addition, find that no one would be willing to pursue her for corruption charges during the two Kirchner terms.

Under the polarising presidencies of the Kirchners, Argentina’s ruling Peronist party has become bitterly divided. “With Kirchner’s death, the battle for dominance within the Peronist movement will be fierce,” says Irenea Renuncio-Mateos, Latin America analyst at IHS Global Insight.

“Meanwhile, the popularity of Daniel Scioli – governor of Argentina’s Buenos Aires province and president of the Justicialist Party – keeps on rising ahead of next year’s general elections,” Ms Renuncio-Mateos added. Mr Scioli is attracting increasing support from both the electorate and business, she said.

Daniel Kerner, analyst at Eurasia, a consultancy, noted that the way the Fernández government has worked until now was for all the decision-making powers to be concentrated in the hands of Mr Kirchner. “This isn’t a government of president and ministers and a team – it was basically him,” he said.

He, however, expected Mr Kirchner’s death to reaffirm Ms Fernández’s candidacy next year, though he acknowledged there was likely to be a battle for control of the government. He expected Ms Fernández to stick firmly to the lines mapped out by her husband, and to trust the same close-knit group of advisers.

In addition, Mr Kerner said it might prove difficult for Mr Scioli – or anyone else from within the Kirchner orbit – from launching his own bid without being seen as a traitor.

“At face value, President Cristina Kirchner is now more likely to stand for re-election (but without the valuable contribution and political coattails of a seasoned strategist) and a cabinet reshuffle over the next few months should not be ruled out,” echoed Alberto Ramos at Goldman Sachs.