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Argentine Political Outlook (Jul-01-19) PDF Imprimir E-Mail
Jul-01-19, por Rosendo Fraga

1. Forty days are still to go before the open primaries and the ruling party warns of its political importance and tries to shorten the difference in favor of Kirchnerism in the Buenos Aires province and stop the flight of votes to the right. None of the nine presidential tickets has competence, so nothing is defined at this level. But the difference in favor of the first implies a sort of "pre-selection" victory with mandatory voting. Despite this, they generate political and economic consequences. A difference of several points in favor of the Fernández-Fernández ticket can generate economic fears and impact the exchange rate stability of recent weeks. At the same time, it complicates the electoral chances of Cambiemos. The difference in favor of Cristina in the suburbs of Buenos Aires is important. This favors Axel Kicillof who takes her on his presidential ballot and at the same time complicates Vidal. For the moment, the decision is that Macri does not participate in the campaign of the BA province, trying to pose it as a "duel" between two women: Cristina Kirchner and María Eugenia Vidal. The initiatives of the ruling party to prevent the candidacies of José Luis Espert and Juan José Gómez Centurión have been disregarded by the electoral court. To deal with the loss of votes in favor of these candidates, the ruling party prepares a strategy of "total polarization", trying to give the open primaries the "all or nothing" impression. It is somewhat risky, because if Cristina wins, the effect on economic expectations may be even worse. The electoral court at the request of the PJ, has prohibited Cambiemos to use the symbols of Peronism (march, badge, etc. used in La Rioja). Cambiemos will have primaries in 17 districts -provincial and municipal- and will be 44 in the PJ. 

2. At the same time, Kirchnerism emphasizes the unification of the Peronist vote, benefiting from the dismantling of the "third space". In the banking guild, Alberto Fernández held a rally with the presence of two governors Manzur (Tucumán) and Aracioni (Chubut), one of the three that runs with "short slate". He was also in Misiones, where he received the adhesion of the elected PJ governor (Ahuad), another the provincial pro-ruling coalition that compete without presidential ticket, and Cristina Kirchner was in Chaco, where she presented her book, in a province where Peronism is divided, but not in the election for President. Alberto Fernandez will meet with PJ governors this week and Massa has met with Cristina, although they have not yet shown a photo of the meeting - as is usually done in Argentine politics - and after the trip that the former President will make to Cuba between July 2 and 10, they would participate in rallies together. The only governor of Justicialist origin who has not aligned himself with the Fernández-Fernández ticket is Schiaretti (Córdoba) despite having strong pressures from his mayors to do so. Meanwhile, the Lavagna-Urtubey ticket advances but with difficulties (the electoral court authorized the open primaries in the city of Buenos Aires). At the beginning of this week, they will hold a meeting with the Governor of Santa Fe (Lifshitz), seeking to rebuild a relationship with Socialism, which was in crisis after the definition of the ticket and the closing of slates. 

3. The regrouping of Peronism takes place in Congress, where the blocks of Federal Peronism are dismantled, while the differences within Cambiemos get bigger. The Federal Peronism bloc elected new authorities after the resignation of Miguel Ángel Pichetto as President. In a disputed election, one senator from Córdoba (Caserio) and another from Formosa for VP (Mayans) were elected. The former - praised by Alberto Fernández - is in favor of the unity of Peronism and the latter openly supports the Fernández-Fernández ticket. Some 21 senators are still part of the bloc. In the Lower House, approximately 20 of the 34 members of Federal Peronism, have turned to support the slate that drives Cristina as VP candidate. In turn, Sergio Massa's bloc has been reduced to 11 congress members, as the one created by Graciela Camaño has split up and 4 remained- she heads the Lavagna-Urtubey's slate of national congress members. The strategy of those who are now supporting the Fernández-Fernández ticket is not to be part of the FPV blocs that respond to Kirchnerism, but to organize an "inter-bloc" where all those of Peronist origin converge, maintaining their independence. In Cambiemos, as the speaker of House (Monzó) and the President of the PRO bloc (Massot) have not renewed their seats, the leadership has hit crisis. In addition, the dispute goes on between "green and blue hankies" within the PRO, which further complicates the situation. For their part, the UCR members, who submitted a bill to suspend the open primaries for President, felt abandoned by the ruling Administration, which claims it was ordered to do so. In a situation like this, it is difficult for the ruling party to obtain the approval of any bill in the coming months, including the recent Mercosur-EU agreement. This week, the Secretary of Energy (Lopetegui) will attend the Senate to report on the "mega-blackout" and the offshore oil tender in Argentine waters, which has favored several British firms. 

4. In the face of the electoral risk, external support to the Macri administration seems to be reinforced. During the G20 Summit, both Trump and Bolsonaro explicitly and publicly said that it was necessary to support the Argentine President to avoid the triumph of populism in the country. This occurred in a context in which Argentina, along with Canada, Brazil and Chile -concurred to the Summit as an observer- condemned the Venezuelan regime again. The Argentine government intends to allocate 8 billion dollars to boost consumption in the pre-election period - from July to October - and for this it will need a new support from Trump before the IMF. The Mercosur-EU agreement is a positive step in the right direction, but it is oversized by the Argentine government. (The presidents of the four countries of the South American group present themselves in their respective countries as drivers of the agreement). They have signed agreements of this type with the EU Mexico and Chile more than a decade ago. The effect is positive - with costs for some sectors - but it does not imply a substantial change. Politically, both regional groups needed an event to revitalize them. Months ago, the EU had signed an agreement of this type with Canada. Now a long process begins - it will take three years for the first stage and a decade for the second - whose key point is the approval of the four parliaments of Mercosur and the 28 of the EU. The government will try to use this agreement in the electoral campaign, but it is difficult for the issue to gain the interest of the bulk of the electorate. 

5. To conclude: 

a) Forty days to go before the open primaries, the ruling coalition assumes it will have important political and economic consequences and seeks to support Vidal in the suburbs and regain the rightist vote it may lose. 

b) Peronism moves forward to the unification around the Fernandez-Fernandez ticket with support, signs and hints, while the Lavagna-Urtubey ticket tries to overcome the problems of space. 

c) The same regrouping occurs in Congress with the dismantling of Federal Peronism while differences within Cambiemos intensify. 

d) In the G20 Summit, Trump and Bolsonaro reiterated the need to support Macri to avoid the return of populism, while the EU-Mercosur agreement is an important achievement though it is overstated.

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