Weekly Report - 11 November 2021 (WR-21-45)

It has been widely expected that the government of President Fernández will suffer punishment at the hands of voters in the congressional polls. Two developments this week appeared to make that more likely. In La Matanza, a working-class suburb in Buenos Aires province, there were angry clashes between stone and bottle-throwing protesters and tear-gas firing police. The immediate cause was the murder of a kiosk attendant in a robbery gone wrong, carried out by a young man with a previous record and his pregnant underage girlfriend. Residents accuse the government of failing to protect them against rampant crime, and of being too soft on its perpetrators.

Although a traditional stronghold of the ruling Partido Justicialista (PJ, Peronists), the incident was seen as likely to encourage angry local voters to swing behind opposition candidates in both La Matanza and other parts of Buenos Aires province. Anger over crime has also surfaced elsewhere in the country, particularly in its third largest city, Rosario, in the central province of Santa Fe, where there were mass protests in late October over the murder of a young architect in a carjacking.

In what could be called an unforced error Fernández also stirred up another controversy by describing Córdoba, one of the country’s most populous provinces and a powerful electoral constituency as “hostile territory” that should once and for all “integrate with the rest of the country”.

• Córdoba

A range of Córdoba politicians criticised the president for being too Buenos Aires-centric (one suggested he should read the Wikipedia entry for Córdoba to learn about the province). There was even a suggestion that Córdoba’s four PJ members in the federal lower chamber of congress might withdraw their support for the 2022 budget bill, making congressional approval difficult to achieve.

Fernández was referring to the fact that Governor Juan Schiaretti, although a PJ member, does not form part of the ruling Frente de Todos (FdT) coalition and on some issues aligns more closely with the country’s centre-right opposition. The comments, which led to equally pointed responses from Córdoba politicians, were seen as needlessly stirring up confrontation at a time when post-electoral political-bridge-building may have to be the order of the day.

Key for the future of the government will be how badly it loses support in the elections. Most analysts believe FdT votes will fall in line with the results of the September primaries, or possibly even by more. Most recent opinion polls show the FdT trailing behind the right-of-centre opposition Juntos por el Cambio (JxC) coalition by around eight percentage points, broadly in line with the nine-percentage-point gap experienced in the September primaries. One survey by Management & Fit suggested that the defeat could be even worse with a 12.2 percentage difference (JxC on 40% and FdT on 27.8%).

Fernández will almost certainly lose his ability to control congress – a major setback. In the senate 24 out of a total of 72 seats are being contested and projections suggest the FdT will lose its quorum, weakening its ability to legislate. In the lower chamber, 127 seats out of 257 are up for renewal. The FdT could lose its position as “first minority” with the opposition ending up with more seats, but also short of an outright majority. A group of provincial and smaller parties would therefore end up holding the balance of power.

The day after the elections, Fernández will potentially have to face three inter-connected crises. The first will be a renegotiation of power sharing within the FdT. The poor result in September led to a major cabinet reshuffle: a new setback now may make another reshuffle unavoidable.

Fernández’s power struggle with his vice president, Cristina Fernández, is likely to heat up again. President Fernández can be expected to seek the support of the Peronist trade union movement and of the generally more conservative Peronist governors. Vice President Fernández, in turn, can be expected to follow a more radical nationalist direction, supported by the large group of ministers she currently controls.

The second crisis will be one of governability. For the second two years of his four-year term, President Fernández will need to have some kind of cross-party agreement in place to avoid a complete congressional deadlock. There have in fact already been exploratory contacts with opposition politicians, but it is not known how feasible a cross-party congressional pact might be.

The third potential crisis will affect the national currency. Argentina needs to finalise an agreement with the International Monetary Fund (IMF). If, in the days immediately after the election, the country appears deeply divided and unable to reach an understanding with the IMF, the peso is likely to come under speculative attack, as it did in 2018 and 2019, creating a worsening financial crisis.&n

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