BUENOS AIRES (Reuters) - Argentina’s Cristina Fernandez will step down as president in December, but her influence may remain strong enough to impede investment-friendly reforms in Congress if her ruling party wins legislative elections in October.
Ending speculation she might run for Congress herself, the outgoing two-term president is letting her economy minister, the architect of her interventionist policies, lead the Front for Victory party’s fight to retain control of the House and Senate.
“The candidate is the project,” Economy Minister Axel Kicillof told local radio on Sunday, following the deadline for candidates to register ahead of the August party primaries.
“Those of us who represent the Front for Victory will be there to carry on and deepen a project that is now 12 years old,” he said, referring to Fernandez’s eight years in power and the four-year presidency of her predecessor and late husband Nestor Kirchner.
Argentines will go to the polls on Oct. 25 to elect a new Congress and president. If Fernandez’s allies keep control of both legislative chambers, it may slow any market-friendly reform efforts by the next president, who is scheduled to take office on Dec. 10.
The government’s fiscal accounts have deteriorated under Fernandez, who is barred from seeking a third consecutive term in October but may run for the presidency again in four years, while heavy-handed trade and currency controls have slowed the economy to a crawl.
Fernandez’s son Maximo Kirchner, leader of his mother’s “La Campora” activist youth organization, is running to represent the southern province of Santa Cruz in Congress.
Front-running presidential candidate Daniel Scioli, who is a member of Fernandez’s party but favors a more pro-market approach to policy, has named Fernandez’s top legal advisor, Carlos Zannini, as his running mate.
“Zannini’s nomination together with the packing of Front for Victory legislative tickets with ‘Cristinista’ hard-liners will affect investors’ perceptions about policy change,” said Ignacio Labaqui, an analyst with Medley Global Advisors.
“Scioli’s ability to make a clean break from Cristina might be negatively affected by her influence after the end of her presidential term,” Labaqui said.
A Congress loyal to Fernandez could also hamper her successor’s efforts to put the country’s 2002 sovereign debt default behind it. The country is in a protracted legal battle with bondholders who rejected the roughly 70 percent reduction in payment terms offered by Argentina’s 2005 and 2010 debt restructurings.
Argentina defaulted again last year when a U.S. judge barred it from paying restructured bonds without settling with the “holdout” investors.
Editing by Paul Simao