Argentina and the fear of the return of Kirchner

Mauricio Macri - President of Argentina

The baggy triumph of Kirchnerism in the last week primaries has been interpreted by many as the announcement of the end of President Mauricio Macri government and the arrival at the Casa Rosada of the Fernandez-Fernandez de Kirchner duo.

In his statements following the knowledge of the results, the President confirmed that he will continue in the campaign until October with the expectation of reversing the results of last Sunday.

He assumes in his support that in the primaries many citizens wanted to express their protest over the difficult economic situation, but that when electing the president they will prioritize the memory of Cristina Kirchner's mismanagement and the corruption that characterized her government.

President Macri's expectations are not accompanied by the markets. Judging by what happened, they take for granted an upcoming change of government and have operated accordingly. It is also clear that many foreign and local investors and analysts see that change with enormous pessimism. Many serious opinions speak of a return of populism to Argentina.

Just as the Friday before the primaries (known as PASO) Argentine bonds and stocks rose when the polls predicted a very favorable outcome for the ruling party, on Monday, with the results, they collapsed violently. The price of Argentine shares fell by more than 40% in one day, the country risk is around 1500 basic points and the price of the dollar has grown by 25%.

Mauricio Macri's presidency failed to correct the mistakes and consequences of the populism that preceded him. His management began auspiciously, but he opted for a gradualism that did not have enough time to become successful.

Politically correct and fear of social reactions led him very close to a default that could only be avoided with the help of the International Monetary Fund. The necessary adjustment probably should have been carried out more quickly.

There are own faults in the electoral setback, but with a very clear origin in the inheritance he received from Cristina Kirchner. It is a shared fault. There is no doubt that the negative reaction of the markets must be largely attributed to the deplorable fame of Kirchnerism.

The return of Peronism

Macri pays the price of having managed the crisis by reassuring only the IMF and the wealthiest classes

The overwhelming victory obtained by Alberto Fernández-Cristina Fernández de Kirchner in Sunday's primaries in Argentina predicts the return to the Casa Rosada of Peronism in the October presidential elections. 

Casa Rosada

In the face of the last-minute predictions and the hope of the markets that justicialism would achieve a tradable victory, the 15 points of advantage (47% vs. 32%) make it clear that Mauricio Macri, who aspires to re-election, does not even seem able to force Peronism to play a second round in two months.

Everything indicates that Peronism will return to power, once again becoming a presumably corrective factor in the social bankruptcy caused by the right. But this time he will do it in a scenario consumed by poverty, foreign debt, recession and galloping deficit, a frame of reference that demands realism and rigorous measures. 

The devastating effects of the economic crisis, the failure of the neoliberal recipe with which Macri arrived at the Casa Rosada and the rapid forgetting of Peronist excesses during Fernández de Kirchner's last term facilitate the new arrival of Peronism.

Neither the cases of corruption that marked the last Peronist presidency nor the suspicions of criminal participation in cases such as the death of prosecutor Alberto Nisman, which reach Fernández de Kirchner, have damaged the expectations of victory of those who, as so many times, they present as the restorers of the progressive message against that of the establishment.

Source: La Nacion, El Periodico, Author's notes.

Ads