Argentina's Macri bolstered by mid-term election

BUENOS AIRES – 23 October 2017: President Mauricio Macri's center-right coalition's victory in mid-term elections has paved the way for a tilt at a second term in Argentina's presidential elections in 2019, analysts said Monday.

All the more so as the vote delivered a setback for his main rival Cristina Kirchner, beaten into second place in a Senate race in Buenos Aires province, a key battleground representing 40 percent of the national electorate.

"This election allows the government to consolidate," said analyst Gabriel Puricelli.

Macri's Cambiemos, or "Let's Change" coalition, "didn't get an absolute majority, but the coalition he leads is more robust," he said.

"That means that voters are getting behind the government program, showing satisfaction," he said. "The opinion polls are showing that people are optimistic about their economic future."

Macri hauled Argentina out of recession in 2016 and the country seems set for growth of around 3.0 percent in 2017.

The 58-year-old president said after his election in 2015 that he had inherited a country "in ruins" after 12 years of unbroken rule by the back-to-back husband-and-wife governments of Nestor and Cristina Kirchner, in power from 2003-2015.

The task of his government, he said, was to fix it.

- Two-term Macri? -

He set about abolishing exchange controls, devaluing the peso, reducing subsidies for water, electricity and gas, and orchestrating serial defaulter Argentina's return to the capital markets in April last year.

Argentines have seen the purchasing power of their peso plummet, but while his government has been buffeted by popular discontent, it has so far managed to avoid electoral damage.

Macri "is expanding his power by winning in 14 of the 24 provinces," analyst Roberto Bacman. And significantly, he had won all the country's "big five" provinces "which accounts for 70 percent of voters."

The combination makes a 2019 presidential run a distinct possibility.

"The conditions are very favorable for 2019. Politically, he is ideally positioned to face an election. In economic terms he still has problems, however," said Puricelli.

Analyst Richard Rouvier warned that the government would have to improve the economic situation of Argentinians, "because when you're up against a weak opposition, it is the economy that becomes the opposition if you don't manage to get inflation under control."

Macri pledged on Monday to continue with an austerity drive, rein-in a large budget deficit and pull down inflation running at 17 percent in 2017. He said his government intended to see through reforms in taxation, labor law and pensions.

However, Capital Economics consultancy said that despite Macri's inroads, "our view is that the budget deficit will remain uncomfortably large over the coming years."

- Peronism divided -

Macri's sweeping victory was helped by deep divisions in the Peronist camp which Kirchner failed to heal.

"Cristina Kirchner won, but Peronism lost," summed up analyst Ignacio Zuleta.

Kirchner may have been elected to the Senate but she remains a divisive figure in a Peronist movement that managed to get both the leftist Kirchner and a right-winger, Carlos Menem, elected president over the years.

The populist ex-president lost to Macri candidate Esteban Bullrich by a four-point margin in bellwether Buenos Aires province, taking the gloss off her political comeback.

She still achieved her goal of a Senate seat, the basic means of keeping her political career alive because it delivers immunity from prison if convicted in any of a series of corruption cases she is facing.

Nevertheless, Kirchner was as defiant as ever, saying a good overall showing for her new Unidad Ciudadana, or "Citizen's Unity", party meant that she would be the standard-bearer for the opposition to Macri's austerity drive.

Kirchner managed to poll three million votes in Sunday election, a significant tally but one that she is unlikely to be able to grow.

"Macri's victory is a signal of the departure of populism, that the economic goals will be maintained and that the idea of re-election has taken hold," political commentator Rosendo Fraga said.

Kirchner may well seek a third term in 2019 but her failure to unite a divided Peronist movement, as well as appeal to right-wing voters, is expected to put paid to her chances.

"She may be a candidate, but under current conditions, she would lose. Her political space lost ground in relation to 2015," said Puricelli.

Meanwhile, Macri insists that his party can only grow, telling triumphant supporters on Sunday night: "All this is just the beginning."