Cristina Fernández Cements Comeback in Argentina Politics

(Bloomberg Businessweek) -- When María Luz Alonso was sworn in last week to assume a key administrative post in Argentina’s Senate, she didn’t pledge allegiance to the nation, the constitution, God, or even to President-elect Alberto Fernández.

“By Cristina Fernández de Kirchner, I swear,” said Alonso, eliciting a round of applause in the chamber.

Her vow underscored the growing perception that Argentina’s future vice president will be the one calling the shots when the new government takes office on Tuesday, something that has concerned investors ever since they learned in May that the former populist president would be joining the Peronist ticket. Even in Argentina, a country notorious for political turmoil, the power dynamic is unusual and risks clashes at the top.

“Cristina is showing that part of Alberto’s power depends on her,” says Camila Perochena, a political science professor at Torcuato Di Tella University in Buenos Aires. “What we have is something unprecedented in Argentina’s history: a vice president that’s going to have a strong role in the lower house, senate, cabinet, and executive branch.”

Fernández will announce his full cabinet on Friday evening before his inauguration on Tuesday. He’s already conceded that his deputy influenced his ministerial picks after previously saying she’d have no voice at all. Fernández de Kirchner is also cementing her grip on Congress, where she will head the Senate on top of appointing allies to key jobs, all but guaranteeing that Fernandez’s agenda will require her signoff.

Her son, Máximo Kirchner, will lead their party’s bloc in the lower house of Congress. The Senate leader, Claudia Ledesma Abdala, is close to the next vice president and is now third in line for the presidency. Eduardo de Pedro, another Fernández de Kirchner ally, is widely expected to be named Interior Minister, an important post that, among other things, entails managing the critical ties between the president and Argentina’s powerful governors.

After mostly keeping a low profile since her presidential term ended in December 2015, Fernández de Kirchner had been widely expected to join the race to unseat the unpopular Mauricio Macri. Then in May, she shocked even seasoned political observers by announcing that she was seeking the vice presidency instead. Fernández de Kirchner’s charisma and name recognition buoyed the electoral fortunes of her running mate, who is viewed as more moderate than the radical former president. The question of how their diverging views will play out has become more urgent now that the two are about to assume power.

In the Senate, Fernández’s coalition gained seven seats in this year’s election and now has 41 of the total 72—enough for a quorum. In the lower house, it notched a majority this week, adding as many as eight legislators who defected from other parties to join the 120-seat Peronist bloc.

Fernández de Kirchner’s ability to unify the ruling bloc in both chambers of Congress will help the future president get key laws passed to give him more sweeping power to resolve Argentina’s deep economic crisis. But as several observers have said, this opens up the possibility that the vice president will be the one shepherding the government’s agenda through the legislature.

“The government seems to have destined the legislative power to Cristina and the executive power to Alberto,” says Esteban Bullrich, a senator who will be part of the opposition in Congress.

The incoming president is also expected to lean on his vice president as he tries to balance competing demands from his own voters on one side, and from creditors that include the International Monetary Fund on the other.

Argentina is heading into its third year of economic contraction, with inflation running over 50%, unemployment above 10%, and more than a third of the population living below the poverty line. The nation’s bonds are pricing in a default, and the government has no access to external financing right now.

Fernández’s working-class supporters are demanding higher social spending. At the same time, the IMF and investors want to see him pick up the austerity baton from Macri and carry on with spending cuts.

As president, Fernández de Kirchner ran an interventionist administration that imposed currency and capital controls and doubled public spending. Her government ignored investors pushing for better terms in negotiations on the country’s defaulted bonds and published fake economic data, leading to IMF sanctions in 2013. Argentina went through three recessions in her eight years in office.

Alberto Fernández was chief of staff to Néstor Kirchner, Fernández de Kirchner’s late husband, who was president from 2003 until 2007. He briefly served in the same capacity during her presidency. But then the two had a falling-out.

During Fernández de Kirchner’s second term, her now-boss repeatedly lambasted her leadership on TV and in the press. The former president has been named in 11 corruption probes stemming from her presidency, in all of which she has denied wrongdoing. A spokesman for Fernández de Kirchner declined to comment; Fernández’s spokesman didn’t respond to requests for comment.

Since sweeping to victory in the Oct. 27 vote, the president-elect has worked to solidify his support among governors in Argentina’s interior provinces while his deputy has legislators’ support and the backing of Buenos Aires’s provincial leadership, which governs close to 40% of the nation’s population. Even those within the party see a power struggle unfolding.

“This is a chess move,” says Agustina Carril, a congressional adviser to the Peronist bloc. “Cristina Fernández showed her power when all the new Senate members were sworn in” on Nov. 27.

To contact the editor responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Matthew BristowCristina Lindblad

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