Argentine power couple loses congressional vote

[June 29, 2009]  BUENOS AIRES, Argentina (AP) -- Argentina's first couple suffered a stunning setback in an election seen as a referendum on their political dynasty, losing control of both houses of Congress.

The loss weakened President Cristina Fernandez's government two years before she leaves office by diminishing her ability to push legislation through Congress and damaging the reputation of her Peronist party as it seeks direction ahead of 2011's presidential race.

Fernandez's husband, former President Nestor Kirchner, lost a bid for a seat from Buenos Aires province. The setbacks could kick off a power struggle within the party, which Kirchner has headed since 2007.

Kirchner conceded defeat early Monday after trailing Francisco De Narvaez by 32.2 percent to 34.5 percent with 91 percent of the ballots counted.

"We have lost by a small margin, we have fought with all our dignity in Buenos Aires province," Kirchner said. "In the coming days everyone will be evaluating the choices and mistakes that have taken place."

De Narvaez of the Union Pro alliance, a charismatic millionaire and sitting congressman who is part of a growing anti-Fernandez faction in the president's Peronist party, was jubilant.

"I said one day we would change history, and that day is today," he said at his campaign headquarters. "The bad politics of old has been defeated.

Allies of the first couple also lost key races in Sunday's election in the city of Buenos Aires and Cordoba and Santa Fe provinces.

With her approval ratings dropping dramatically this year amid a farmbelt crisis and economic meltdown, Fernandez arranged for congressional elections to be held four months early. She defended it as a way to let lawmakers get a jump-start on dealing with economic difficulties, but her foes blasted it as an attempt to shore up congressional support before her numbers eroded even further.

Kirchner's entry into the race in a desperate attempt to extend the couple's power turned the election into a referendum on his wife's tenure and is thought to have seen the seat as a launching pad for his own return to the presidency.

The former president argued that a win for his coalition was necessary to protect the economy, reminding voters of his success in bringing the country back from collapse during his 2003-07 administration.

"We have to stand by this model; it's us or chaos," he said at a May 30 rally.

The party even ran so-called symbolic candidates -- popular political figures such as governors and mayors who were listed on the ballot but widely expected to step aside in favor of others on the party ticket if they won.

Allies of Fernandez and Kirchner have controlled Congress for six years, but before the vote analysts predicted they could lose two dozen seats in both chambers.

Although supporters once praised Fernandez and her husband for slashing unemployment with public works programs that jump-started Argentina's battered economy, opponents and analysts now cast the couple as authoritarian and unwilling to compromise.

"Their overall nature is too much intervention," said Alberto Ramos, senior Latin America economist for the Goldman Sachs investment firm. "It's not going to put Argentina on a crash course, but it is a story about growing inefficiencies and increasingly autocratic management."

The Kirchners' problems have also "gone beyond substance to style," Ramos said. "They're very confrontational and stubborn: It's all or nothing, and they'd prefer to break rather than bend. People have gotten disenchanted with that."

Fernandez's approval rating tumbled to 29 percent this year after a four-month standoff over export taxes with Argentina's powerful farm sector. She has extended price caps, nationalized $23 billion in pensions and taken over the country's biggest airline in a bid to boost the state's role in the economy.

"I'd like the government to be somewhat weakened by this election," said Alejandro Siniscalco, 41, after casting his ballot in the middle-class Buenos Aires neighborhood of Caballito. "Many things aren't being done well, and we need to put a brake on the government in congress."

The government moved up Sunday's vote, originally set for October, in a step that critics said was meant to poll voters before the global economic crisis took a bigger toll on Argentina. Growth fell to 2 percent in the first quarter, its slowest since the economy collapsed in 2002, and annual inflation officially dipped to 5.5 percent in May -- although most independent economists believe the actual figure tops 15 percent.

Despite the implications for the first couple's political future, analysts agreed that the results of Sunday's vote were unlikely to change the president's policies. Fernandez retains decree powers and is unlikely to back off her convictions, Ramos said.

Half the country's 256-member Chamber of Deputies and one-third of the 72-member Senate were at stake.

[Associated Press; By MAYRA PERTOSSI and DEBORA REY]

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