Not all this again. Not the pounding of the peso. Not the debt bonds reduced to junk. Not the daily price hikes. Not the mumbling ministers eyeing the right time to quit. Not the hushed whispering about hyperinflation. Yep. Get your cheesy “Don’t cry for me Argentina” headlines out of the icebox – because it’s all happening again.
The PASO primaries have passed and it appears that President Mauricio Macri, the leader of the centreright coalition that rose to power in 2015, has already fumbled his reelection bid. Macri won 32 percent of the vote on Sunday. Alberto Fernández, his Peronist rival, won 47 percent.
Wait – is Alberto Fernández a Peronist or a Kirchnerite? His runningmate after all is former president Cristina Fernández de Kirchner. Stop wasting your time. What Macri’s team seems to have missed entirely ahead of the vote is that the Peronists have not been this united since 2011.
But what about Buenos Aires Province Governor María Eugenia Vidal, a Macri loyalist who according to polls is popular? She did well, right? Sorry, but no. Vidal was routed 52-34 percent by the leftist economist Axel Kicillof, Fernández de Kirchner’s economy minister when she left office in 2015.
How did that happen? Well, unemployment is higher than in 2015. Poverty is higher than 2015. Inflation is higher than in 2015. Voters are having a hard time making ends meet. Top all that with the massive utility rate hikes and what do you get? Electoral defeat, that’s what.
You don’t need Cambridge Analytica for that to dawn on you. The president thought he could fast-talk his way to victory, largely thanks to his big data-fuelled propaganda machine, even in hard times. That turned out to be quite the miscalculation. Then came another miscalculation: missing the significance of that united Peronist front. Sergio Massa, briefly CFK’s Cabinet chief, quit Kirchnerism in 2013 and took about 20 percent of the vote with him, especially in Buenos Aires. Now Massa has joined Alberto Fernández’s camp.
You fumble the economy. You fumble the politics. You lose the primary on Sunday. The next thing you know on Monday the peso loses 23 percent of its worth overnight. Ouch. Not again. Macri called a press conference on Monday with his Peronist running-mate Miguel Ángel Pichetto. Remember Pichetto? Tapping him looked like a wise move, right? But Pichetto only had limited territorial clout in the Peronist party. That’s why he made a name for himself as a legislative operator and never made it to governor. Check out the result in Río Negro, the Patagonian province where Pichetto is based. The Macri-Pichetto ticket lost there too.
Yet, despite all that on Thursday night, reports emerged that he would replace Marcos Peña, Macris electoral whizz kid, as Cabinet chief. Economy Minister Nicolas Dujovne was also apparently on the way out when this column was being written in the middle of the economic debacle which is bound to bring more inflation. By press time Friday, however, the government had shot down the rumours.
Back to that Monday press conference. Most observers said the sleepdeprived president sounded rather preachy, blaming voters, in a messianic tone of self-righteousness, for provoking the crisis by supporting the wrong candidate. The president’s new problem is that much of the local press, which up until Sunday’s debacle had been friendly, has lost its patience and is no longer pulling its punches. Even the international press is implying that Macri has lost touch with reality.
“The election did not happen,” the president told the press on Monday. But is it only Macri? Lawmaker Elisa Carrió, a key member of his coalition, complained on Wednesday about irregularities in the preliminary vote count and implied that the result had been manipulated by gangs of drug-traffickers in the northern provinces and Greater Buenos Aires. Electoral officials, unluckily for her, say the vote was clean.
If Fernández de Kirchner reminded her detractors of their least favourite schoolteacher, Macri now comes across as a dithering yet patronising headmaster who fails to realise that his school is on fire. Carrió stokes the flames. The danger for Alberto Fernández is that he could soon be caught up in the blaze, along with the Central Bank’s foreign currency reserves, even when technically he is not the elected president.
Governor Vidal called her own press conference on Monday in a bid to control the damage. Vidal’s coalition only managed to win two districts in the urban belt that surrounds Buenos Aires City. The working class voted Peronist. Vidal’s press conference was less confrontational. But the underlying message of both Macri and Vidal is that they will put up an electoral fight.
The most terrifying part of the current situation is that after Sunday’s primary vote there are no elected authorities. There’s a void with symbolic winners and losers. The first round is scheduled for October 27.
Even the standing of Macri’s coalition in Buenos Aires City, its bastion, is now in doubt. Buenos Aires City Mayor Horacio Rodríguez Larreta needs to win 50 percent of the vote in October to avoid a run-off. Rodríguez Larreta garnered 46 percent on Sunday and is challenged by Matías Lammens, Alberto Fernández’s mayoral candidate.
Macri on Monday looked determined to launch an all-out attack to win in October. The problem with all-out attacks when you are losing badly is that you usually get thumped down at your own end (see the last Libertadores Cup football final in Madrid for details).
The massacre of the peso continued. A dollar was worth 46 pesos the Friday before the primaries (when the market fabricated the euphoria of a Macri win for itself). On Wednesday it was worth 63 pesos. The respite came a day later when Fernández declared that a dollar at 60 pesos “is all right.”
The president on Wednesday chose to address the nation via a recorded speech. He apologised for Monday’s insomnia-hit press conference saying that he was sad and tired and announced a series of income tax breaks, plans to hike the minimum wage, and welfare benefit increases. The president went from fumble to humble in two days. Yet there was baulking. Macri announced a 90-day freeze on fuel prices apparently without a full agreement with the sector.
That afternoon Macri and Alberto Fernández spoke on the phone. The Frente de Todos candidate said he was willing to help with the transition. Fernández, during a press conference after his conversation with the head of state, then blamed the crisis on the ruling coalition’s strategy of portraying him as the leader of a bunch of serial defaulters and ideological lunatics bent on turning the country into another Venezuela.
Was Macri’s phone call to Fernández a tactical bear hug? It appears Macri thinks he can pull off the practically impossible feat of improving his performance in October to force a run-off. A candidate is elected president in the first round with 45 percent of the vote or with 40 percent and a 10-point difference over his nearest rival. The president’s plan is to snatch enough votes away from Alberto Fernández and other rivals so that the outcome in October is, say, 44-35. A bigger turn-out in October (up to, say 81 percent from 76 percent) could help the president’s outside chances of achieving this. That kind of result would trigger a run-off. It sounds improbable, though. There’s no run-off in Buenos Aires Province and there is practically no chance that Vidal will be re-elected.
But what choice does Macri have? The real election is in October and it includes congressional candidates for his coalition who will serve even if the president loses. It could be another crass miss, but Macri has chosen to go down fighting. Right now, he is going down fumbling.