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Mid-term polls leave Fern ndez a lame duck
Financial Times
June 30, 2009

By Daniel Schweimler in Buenos Aires

Cristina Fern ndez de Kirchner faces two years as a lame-duck president of Argentina after losing the two-thirds majority she needed in Congress to push through economic reforms.

The government suffered a resounding defeat in Sunday's mid-term elections for half of the 275 seats in the Congress and a third of the 72 Senate seats, losing its majority in both chambers.

The result was seen by analysts and opposition figures as a repudiation of grand plans by the president and N stor Kirchner, her husband and predecessor as president, to consolidate power before presidential elections in 2011.

Government candidates hardly figured in the fight in several areas.

The city of Buenos Aires was won by the right-of-centre PRO party, headed by Mauricio Macri the businessman, former president of Boca Juniors football club and city mayor. Fernando "Pino" Solanas, a leftwing film director, came home in a strong second place.

The populous agricultural province of Santa F went to Carlos Reutemann, a former Formula One racing driver, who beat the Socialists into a close second.

Mr Kirchner put his name at the top of the list for a seat in Congress. But he lost by a clear margin to Francisco de Narv ez, a millionaire entrepreneur. The Kirchners also lost in their southern heartland, the sparsely populated, but rich in oil and gas, Santa Cruz province.

Writing in the daily La Naci n, analyst Francisco Olivera said: "Argentina's business community breathed an almost universal sigh of relief as the government's defeat became apparent."

Business groups blame the government for economic uncertainty in the country, which has seen a drop in foreign investment and a flight of capital.

The president brought the elections forward from October, saying it would allow her to concentrate on dealing with the effect of the global economic crisis. Her critics called it a ploy to increase power before the next elections, when the true effect of the crisis would be felt by voters.

Sunday's victors do not take up their seats until December. Many expected Mr Kirchner to replace his wife in the presidency in a kind of alternating husband and wife double act. After Sunday's election, that seems unlikely.

In the short-term, Mrs Fern ndez is expected to re-shuffle her cabinet to give the impression of freshness. But the president has lost the Congressional majority she needed to push through export tax reforms and changes at INDEC, the much-maligned official statistics office.

Mrs Fern ndez won a clear victory in October 2007, succeeding her husband, who had guided Argentina through its economic crisis of 2001-02.

But her popularity soon began to plummet, with inflation biting, crime rising and a perception in the opposition media and among a critical public of government incompetence.

Mr Kirchner, meanwhile, took over as head of the governing Peronist party and worked behind the scenes to consolidate his wife in office. The general perception is that he pulls the strings.

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