Defeat sweet, but defeat at the end of the day. The Argentine government suffered a correction at the polls this Sunday that reinforced the opposition and complicates its position in the face of negotiations with the IMF to restructure its debt. A message that came very clear to the president, Alberto Fernández, who, shortly after the first results were known, announced that he will negotiate with the opposition the package of reforms that he will present to the international organization. It has no choice: Peronism lost the Senate for the first time since the end of the military dictatorship in 1983, and the opposition gained ground in Congress.

Even so, the images of the election night did not indicate that the Government had suffered a strong correction, in part because it had been taken for granted for months and they sought to hold on to any good news. Faced with the funeral atmosphere of the first round, the campaign headquarters of the Frente de Todos, the coalition led by Vice President Cristina Fernández de Kirchner, was celebrating. The reason was very simple: they had managed to reduce their national margin of defeat from 10 to 9 points and in their electoral bastion, the Province of Buenos Aires, they had only lost by 1.3 points, instead of the 4 that the opposition coalition Together for Change in September. This last minute ‘comeback’ allowed them to save by the minimum the first position in Congress, although there is a seat that ‘dances’ by a hundred votes in the province of La Rioja that could still lead to a tie between both forces.

Even so, the parliamentary position of Kirchnerism is seriously compromised. In the Senate, where they have gone from 41 to 35 seats -with the absolute majority situated at 37- after losing in 6 of the 8 provinces that renewed acts this year, power now passes to three senators from small regionalist parties: Together We Are Rio Negro, the Social Concord Party of Misiones and We do for Córdoba. In Congress, they lost two seats and were left with 118, compared to 116 of the ‘macrismo’, which added one (in the absence of knowing if that last seat at stake between both parties, which at this time would still be Peronist, will lead to the tie at 117). To reach 129 of the absolute majority, they will need to agree with a constellation of 14 regional deputies.

Perhaps the most outstanding fact was the emergence of two forces at opposite ends of the ideological spectrum. The Trotskyist-Leninists of Nicolás del Caño obtained 6% national, their best historical result, and 4 deputies, while the anarcho-capitalists of Javier Milei obtained 4.7% and 5 seats.

The blow to Kirchnerism was cushioned by two factors. On the one hand, in these elections only half of the Congress and a third of the Senate were renewed, and the Government arrived with the mattress of its victory in both chambers during the 2019 presidential elections. Furthermore, in the elections of four years ago, with Those that had to be compared, Peronism also suffered a defeat against the party of then-president Mauricio Macri, so it did not have so much to lose. The fact that they have worsened their poor 2017 result is certainly not a good sign.

The big winner, meanwhile, is Macri and his coalition, who have been resurrected by the pendulum of Argentine politics in recent years. In 2017, Kirchner seemed mortally wounded after suffering a serious personal defeat in Buenos Aires and seeing Peronism lose by 9 points at the national level. In 2019, Macri was the one who seemed finished after falling by 9 points to Fernández. And now it is the Peronists once again who have lost by 9 points to Macri’s team, barely renewed since their defeat in 2019. The former president was on the front page in his act of celebration, and whoever was his right hand, María Eugenia Vidal, swept the capital after losing just two years ago in the Province of Buenos Aires.

Guzmán, reinforced

The loss of room for maneuver in both houses and the resurrection of macrismo have forced the president to recognize that he will not be able to approve an agreement with the IMF without a national consensus. In a video message recorded at his official residence, the Olivos farm, Fernández announced that he will have the opposition for any pact for debt restructuring. The president hopes to agree on a package of measures that would come into force as of 2025, so he needs the support of Together for Change to avoid that, if Peronism loses the presidential elections of that year, the new government will outright repudiate the pact with the IMF, something the institution does not want to risk.

For this, Fernández specifically mentioned his Minister of Economy, Martín Guzmán, an economist expert in debt renegotiations, who is in the Government precisely for this. In recent weeks, the Kirchner wing of the government had begun to throw darts at him, but the result of the elections has left the vice president without bullets and has reinforced the minister. Now his objective will be to square a complex sudoku game: to satisfy the IMF, Kirchnerism, traditional Peronism and the Macrista coalition, which in turn includes parties that go from the center-left to the center-right. A full-fledged State pact for which they are already invoking the Moncloa Pacts as inspiration.

Argentina’s legislative elections threaten the stability of the Government and negotiations with the IMF