- While Finance Minister Martin Guzman is meeting with the International Monetary Fund (IMF)’s Kristalina Georgieva today, 23 March, recent events in Buenos Aires provide the best indication of the government’s political and economic direction of travel.
- Vice-President Cristina Fernandez (CFK)’s pursuit of legal impunity for herself and her children is not a political sideshow but has crucial implications for economic policy and electoral strategy.
- This dynamic could be politically corrosive for CFK, as President Alberto Fernandez’s declining poll ratings affirm – unless CFK’s reading of post-pandemic politics is on a par with her shrewdly managed 2019 election gambit.
Events since President Alberto Fernandez’s combative 1 March speech to mark the opening of the new congressional session bear out our view that Vice-President Cristina Fernandez (CFK) is firmly in the political driving seat. Over March, CFK and Kirchnerismo’s influence has been manifest most clearly in two areas:
Legal arena: as forecast, Justice Minister Marcela Losardo – who is one of Fernandez’s few close allies – has been dropped. A Peronist deputy, Martin Soria, will be sworn in as her replacement later this week. Soria supports CFK’s view that she is a victim of “lawfare” – the exploitation of the legal system in pursuit of political ends. He will have two priorities:
- to push through a change to the way the Chief Public Prosecutor is selected so that CFK can more easily replace the interim occupant Eduardo Casal with a pliant substitute.
- to advance a stalled judicial reform that seeks to expand the Supreme Court and cut powerful investigative judges down to size.
Economy: the announcement last week that – to help control inflation – large companies across an array of sectors will be required to provide the government with monthly reports on sales, stock levels, and prices is another sign that Kirchnerista heterodoxy is in the ascendant. The possibility that the announcement was made without the knowledge of Minister of Productive Development Matias Kulfas highlights how Kirchnerista cadres (in this case, secretary for internal trade Paula Espanol, who answers to CFK’s favorite, Axel Kicillof) continue to muscle their way into policy, as well as posts occupied by more moderate Peronists.
CFK’s increasing assertiveness could produce awkward side-effects. CFK recruited Fernandez precisely to broaden her appeal in the 2019 elections because Fernandez was seen as representing a more pragmatic variety of Peronism associated with her late husband Nestor Kirchner as opposed to her more combative, radical Cristinista brand. By relegating Fernandez and openly pursing her own legal interests, CFK risks weakening the Peronist coalition ahead of the October mid-term elections. The mid-terms are not just significant for the second half of Fernandez’s presidency but also for the 2023 presidential succession, which is key to ensuring power and immunity for CFK and her children into the medium-term.
However, there are several factors that could explain why Kirchnerismo is adopting a bolder approach:
Signs from elsewhere may give CFK hope that the Left is on the cusp of a region-wide revival. Brazil’s Luiz Inacio Lula da Silva recently had his corruption convictions annulled, potentially enabling him to stage a return in 2022. Ecuador could well vote in a leftist as president next month, paving the way for an ex-president who has been convicted of corruption to make a comeback that must have looked inconceivable even to Rafael Correa himself. These cases may persuade CFK that much of the population will condone or overlook judicial matters and past allegations of corruption when economic worries are so pressing; hence her emphasis on keeping utility tariffs and transport price increases to a minimum before October (which in turn help explain why Guzman’s IMF meeting today is unlikely to produce much in the way of concrete progress).
In parallel, CFK’s calculation may be that the poverty, unemployment, and general economic distress caused by the pandemic and strategies to control its spread represent an opportunity to develop new modes of political clientelism. At the same time, those sectors that CFK invited back into the Peronist fold in 2019 – most prominently represented by Fernandez himself and lower house president Sergio Massa – have been co-opted and therefore cannot cause her serious damage (as Massa did in 2013) if they were to break with her again.
Risks to CFK’s plan
This logic may yet prove correct. However, recent polls suggest that support for Fernandez has ebbed to CFK’s level. In other words, Fernandez is no longer helping raise CFK’s electoral ceiling, which indicates that CFK’s greater prominence remains a turn-off for centrist voters. Meanwhile, Kirchnerismo’s advances across the government bureaucracy risk causing tensions in the governing coalition, not to mention policy dysfunction that could impede economic recovery. CFK needs the pragmatic Peronists, not just for electoral purposes, but to deliver an eventual IMF deal for which she hopes she will not have to take full responsibility. If these dynamics do not change before October, Peronism could suffer an electoral setback, which would jeopardize the VP’s medium-term goals.
Nor is it clear that Soria will be able to advance CFK’s legal interests to her satisfaction. Soria’s appointment could actually complicate the governing Front for All (FdeT)’s position in the lower house, where it already lacks a majority, because of provincial resistance to the minister-designate. If judicial reforms do not advance under Soria and CFK continues to face multiple legal battles, it could raise the possibility of an official pardon coming under consideration. CFK clearly recognizes the potential for a public backlash that this would trigger. Her restraint likely also reflects the knowledge that such a request would surely stretch relations with Fernandez to breaking point.