October 13, 2015 / 6:38 PM / 2 years ago

Scioli battles 'puppet' barbs in Argentina election race

Argentine presidential candidate Daniel Scioli (C) speaks to members of the media beside Uruguayan President Tabare Vazquez (R) during a meeting at the Uruguayan Presidential house in Montevideo, October 13, 2015. REUTERS/Andres Stapff

BUENOS AIRES (Reuters) - Daniel Scioli is the clear front-runner in Argentina’s election because he has the support of outgoing President Cristina Fernandez. To win it, though, he now needs to convince swing voters he will not be her puppet.

The fiery leftist’s backing handed Scioli, a moderate within the broad Peronist movement, a support base worth almost one in three of all voters, especially in working-class areas where her welfare policies are popular.

But Fernandez is a divisive leader and many centrist voters want an end to the capital controls, import restrictions and high inflation that are also part of her legacy.

Scioli’s best hope for winning the presidential race is an outright victory in the first round on Oct. 25, when he will just need 40 percent support if he has a 10-percentage point lead over his closest rival.

But two weeks ahead of the ballot opinions polls show him just short of that level. If he fails, he would need 50 percent support in a second round runoff and might be vulnerable.

At stake is the pace and depth of reforms to liberalize Latin America’s third biggest economy and smooth its return to global credit markets after Fernandez’s government defaulted on debt payments last year.

In the hunt for undecided votes, his rivals are playing up concerns over how much freedom Scioli, the governor of Buenos Aires province and a former powerboat champion, would have to shape policy and whether Fernandez would continue to call the shots.

“Scioli owes all his votes to Cristina,” Alberto Fernandez, a close political ally of third-placed candidate Sergio Massa, told Radio 10.

Early in the campaign, officials close to Scioli were concerned he might lean too far toward the open-market policies sought by investors. He only secured Fernandez’s endorsement after he chose a close confidante of hers as his running mate.

Fernandez shows no signs of bowing out quietly. In recent weeks, she has stepped up her public appearances, often flanked by Scioli, complicating his task of forging his own identity.

Mauricio Macri, leader of the center-right opposition party PRO and Scioli’s closest challenger, has denigrated the 58-year-old as in the pocket of the president.

“It is clear that the ruling party is having trouble defining who will govern in the event it wins,” Macri said in Argentina’s first-ever presidential debate this month after Scioli ducked out of the event.

Fernandez cannot run for a third straight term but has been urged by some allies to stage a comeback in 2019, forcing Scioli to fend off suggestions he would simply be keeping the seat warm for her.

Scioli brushes of the criticism and says he is his own man.

“I will exercise my constitutional powers fully,” he told Reuters at a boxing tournament near his home outside the capital, Buenos Aires.

GUARDED CAMPAIGN

Scioli drew 37.1 percent support in a new poll by Poliarquia on Sunday. Macri trailed with 26.2 percent and Massa, a centrist who defected from the ruling party in 2013 to form a new dissident Peronist party, Renewal Front, had 20.1 percent.

The poll showed Scioli had the support of between 38.5 and 41 percent of respondents once undecided voters were discounted.

Throughout the campaign, Scioli has had to balance keeping the Fernandez faithful on his side while convincing others he will have enough autonomy to change her more unpopular policies.

He is promising pro-business policies to spur economic growth but rejects dismantling social welfare policies and workers’ rights.

He says his policy of “gradual change” will draw investment worth $30 billion annually and warns the rapid changes proposed by Macri would drive Argentina into a recession.

But he has left it to advisers and allied provincial governors to expound on sensitive issues that could rankle Fernandez: the need to restore Argentina’s access to global credit markets and how to tackle bloated subsidies and high inflation.

“There are issues on which we cannot yet speak. We can not touch upon all the topics we’d like to,” one Scioli camp insider acknowledged.

Scioli’s overtures to the center have been subtle - a photo call with the U.S. ambassador hinted at a more conciliatory relationship with Washington than under Fernandez.

In public, Scioli says there is no rush to resolve the acrimonious legal battle with U.S. hedge funds that plunged Argentina back into default in 2014 even though his inner circle acknowledges that he wants a deal.

Massa and Macri have both said they would seek an agreement with the “holdout” funds, but stop short of saying what a fair deal would look like.

The influence of Fernandez, who regularly rails against capitalist excesses, may endure beyond Dec. 10, when she hands over power.

She has named eight of the 10 central bank directors in the past 12 months, including its president, her trusted cabinet chief is vying for Scioli’s current job of governor of the country’s biggest province and her finance minister is likely to lead a powerful bloc of Fernandez allies in the next Congress.

Fernandez has also pushed a bill through Congress requiring the next president to seek lawmakers’ approval to sell state-owned assets.

Moreover, she still has higher popularity numbers than any of the six candidates to replace her.

One government official refused to rule out Fernandez making a political comeback in four years time but said it would depend largely on how Scioli does.

“If Scioli were to govern well, she wouldn’t return,” the official said, declining to be identified because of the sensitivity of the issue.

Additional reporting by Sarah Marsh; Writing by Richard Lough; Editing by Kieran Murray

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