Et was a matter of time before the cracks within the governing alliance in Argentina became ruptures. The agreement reached last week between the government and the International Monetary Fund (IMF) has now given the radical camp of the Peronist Party an excuse to publicly distance itself from the moderate bloc around President Alberto Fernández. On Monday, the leader of the parliamentary group in the House of Representatives, Máximo Kirchner, announced his resignation from his position. He does not stand behind the government’s strategy and the deal with the IMF, said Kirchner, the son of former Presidents Néstor Kirchner and Cristina Fernández de Kirchner, who is also the current Vice President.
On Friday, after years of negotiations, the Argentine government and the IMF reached an agreement to restructure pending payments on a mountain of debt worth more than $44 billion. The IMF gives Argentina more time to repay its debt. In return, Argentina should commit to reducing its deficit to zero by 2025, slashing the government’s high energy subsidies and significantly reducing inflation from the current more than 50 percent.
Fernández sees the agreement as a breakthrough. “I am convinced that this is the best agreement that we could reach,” he said in an interview. But even during the negotiations it had become clear that the radical Peronist wing around the Kirchners would reject practically any demands from the IMF – and in this way evade political responsibility and make political capital.
A political exchange of blows is imminent
The negative attitude towards the IMF is not only well received by the Peronists, but also by large parts of the population. Kirchner wrote in his statement that he would remain in the bloc, but that it was better to make room for someone who believed in the program with the IMF. Fernández meanwhile announced that he would replace Kirchner in the next few days.
Now things are getting tricky for Fernández. On the one hand because of the agreement with the IMF itself. This is by no means certain, but has yet to be approved by the Argentine Congress. Without the support of the “Kirchnerists”, Fernández is completely dependent on the good will of the strengthened opposition.
Weeks of intense political slugfest lie ahead, with the clock ticking. At the end of March, Argentina has to make repayments of 2.8 billion dollars, but the country’s reserves are unlikely to be sufficient. Without an agreement, Argentina faces yet another default, with catastrophic consequences for the country’s economy.
Politically, the rift between Kirchner and Fernández once again exposes the ongoing power struggle within the Peronist Party at a time when Fernández needed all available political backing. Vice President Cristina Kirchner, who is politically more powerful than President Fernández, should not be behind her son’s move, they say. But as is often the case in such situations, she wraps herself in a meaningful silence.
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