Argentina's legislative elections on Sunday sent President Cristina Fernándes de Kirchner a clear message. Kirchner lost in half of the 24 districts that make up the country, including the five largest. The governing party Frente para la Victoria (Victory Front, or FPV) still managed to get the most votes, which assures a Parliament majority for the remaining two years of Kirchner’s second and final term inoffice -- but points at a radical change in the next presidential election, scheduled for 2015.
The legislative election also brought the discovery of a new rising star in Argentinean politics: opposition leader Sergio Massa, a former pro-Kirchner militant who broke from the FPV in June and formed the center-right Frente Renovador (Renovation Front, FR). Massa was the big winner in Buenos Aires, with 43.9 percent of the vote for FR and just 32.1 percent for Kirchner's FPV. Buenos Aires, where 40 percent of Argentinean voters live, is the big prize in presidential elections: nobody has ever won the presidency without winning the capital.
Despite being still two years away from the next presidential election, predictions suggest the next Argentinean leader will nmost likely not be led by FPV for the first time in over a decade. The new leader won't be a Kirchner either, also for the first time since the election of Nestor Kirchner, Cristina's husband, in 2003. The current president Kirchner will be barred from running after finishing her second term.
Her successor will inherit a country with sky-high inflation (currently at 24 percent), a mounting unemployment rate (7 percent) and a devalued currency (the Argentinean peso has dropped 18 percent versus the U.S. dollar since the beginning of the year, the steepest decline after the Venezuelan bolívar).
The day after the legislative election, the Buenos Aires stock market dropped 1 percent; the Merval index, which is up more than 60 percent for the year, fell a further 4 percent on Tuesday, closing at 5,180.17.
The Argentinean peso has also reacted following the election. The official exchange rate is currently 5.84 pesos per American dollar, a significant drop from the 4.9 pesos per dollar rate in January. In May, when the government restricted access to dollars in an attempt to control the exchange rate, the black currency market boomed: the “blue dollar,” as it is called in Argentina, where the government tolerates the under-the-tabhle market, rose to a relatively whopping 10 pesos per American dollar in August.
The rate kept steady for months, until the day after the election, when the "blue dollar" dropped to 9.7 pesos.
However, experts do not think there is a a fundamental change in economic policies coming. nEconomist Ramiro Castiñeira, from consulting firm Econometrica, told Spanish news agency Efe that the loss for Kirchner shows the unhappiness of the Argentinean people with the current administration.
“In the government’s agenda there is only one bullet point: reach 2015 without hitting recession,” said the analyst. “There will be spot measures, but not structural changes. The government will try to patch holes to win some time, but it will not do anything substantial.”