Argentina’s ruling couple face key test at polls

BUENOS AIRES, Argentina — Argentina’s president and her predecessor husband are fighting for their political survival in congressional elections that have become a referendum on their populist economic policies and autocratic leadership style.

President Cristina Fernandez — who has nationalized pension funds and waged a four-month battle over taxes with the powerful farm sector in a bid to increase state control over the economy — has seen her approval ratings plummet to 29 percent this year.

Her husband, former President Nestor Kirchner, is trying to give her a boost with his own campaign for Congress, a run he has used to remind voters of his success in bringing Argentina back from economic catastrophe during his 2003-2007 administration.

Kirchner has cast Sunday’s vote as a litmus test on his wife’s tenure and economic prowess — and also is thought to view the congressional seat as a launching pad for his own return to the presidency in 2011.

“What’s at play in this election is Nestor Kirchner’s capacity to retain a critical mass of power,” said Julio Blanck, editor-in-chief at Clarin, a leading Buenos Aires newspaper. “When Kirchner transformed the midterm election into a referendum, what he did was put his own political destiny up for vote.”

Kirchner, who was widely popular as president, has remained a key power broker as head of the Peronist party. But recent polls show him in a near dead-heat with dissident Peronist Francisco Narvaez, a charismatic millionaire and sitting congressman who forms part of an anti-Fernandez Peronist block that has been growing in the legislature.

The two rivals are battling for a congressional seat in Buenos Aires province, home to more than a third of Argentina’s 28 million voters. Voters on Sunday are electing half of the 256-member Chamber of Deputies and a third of the 72-member Senate.

“An anti-Kirchner sentiment and willingness to punish the government is high and driving this election,” said Daniel Kerner, a Latin America analyst at the Eurasia Group in New York.

“The key will be how much the Peronist machinery will help mobilize the vote in Kirchner’s favor, and how much voter support for local leaders … can help Kirchner’s slate.”

One way Peronists are drawing local support is by running popular athletes, artists and sitting politicians who are allowed to withdraw after winning, freeing the party to bump lesser-known candidates from the bottom of the ballot into office in their place.

The Peronist party will likely retain more seats than any other single party in the election, even if it loses 20 seats in the House and five in the Senate, as some analysts have predicted.

If Kirchner comes up short, though, it could do serious damage to his wife’s brand.

“A Kirchner loss would be a disaster for the government,” diluting Fernandez’s authority and complicating her ability to govern as power flows to winning Peronists in other provinces who may emerge with a shot at the presidency in 2011, Kerner wrote in a research note.

It also could force Fernandez to cede ground on some of her economic policies, such as controversial soy export taxes.

Argentina’s economy rebounded from negative 11 percent growth to average more than 8 percent a year under Kirchner’s 2003-2007 administration. It has since slowed to 2 percent in the first quarter, its worst showing since 2002, and the economy is expected to shrink by 1 percent this year, Goldman Sachs senior Latin America economist Alberto Ramos said.

The government says annual inflation slowed to 5.5 percent in May, but that figure is widely thought to top 15 percent, making it a key issue for Argentine voters.

On the other hand, a strong showing by Kirchner in the congressional election could boost the first couple’s efforts to bring more business under state control. Last year, the government took over $23 billion in private pension funds as well as Argentina’s main airline.

“Be clear that if we had no majority in Congress, Argentina would once again fall into the void and crisis of 2001,” Kirchner said of his coalition at a May 30 rally, referring to the country’s economic meltdown. “We have to stand by this model; it’s us or chaos.”

Even with a Kirchner loss, newly elected lawmakers don’t take office until Dec. 10, giving Fernandez five months to prepare to face them. And while they may push hard to change her policies, she “could become even more aggressive” in defending her governing project, Kerner said.

“What (Fernandez and Kirchner) do is born out of conviction, not just political expediency, so even if they’re damaged after the election, I don’t believe they’ll change policy or become more pragmatic or conciliatory,” Ramos said.

Barclays Capital, meanwhile, warned investors to expect fraud accusations and social unrest once polling results are announced.

Associated Press writer Theresa Bradley in Mexico City contributed to this report.