Argentina: new face, old problems

Argentina elected left-winger Alberto Fernández as president on Sunday, with the Peronist triumphing over centre-right incumbent Mauricio Macri. Macri’s term was dogged by an inflation crisis, which ended in a $56bn International Monetary Fund (IMF) bailout.

Macri’s “business-friendly” presidency ended in disaster, says The Economist, but the Peronists who preceded him had an “equally calamitous” record. Cristina Fernández de Kirchner, Argentina’s deeply divisive, economically illiterate former leader, is the new vice-president. It remains to be seen how much influence she wields.

The new president inherits a government “saddled with more than $100bn in foreign debt”, say Santiago Pérez and Ryan Dube in The Wall Street Journal. The IMF rescue deal is conditional on the austerity measures that “Fernández campaigned against”. Fernández has promised to end the crisis but has no access to external financing, says Benjamin Gedan of the Wilson Center. “Populism without money is impossible.” But almost half of the IMF’s current loans are thought to be owed by Argentina. So a period of hardball negotiating and debt restructuring seems inevitable.

That said, “broader Latin American markets have largely shrugged off” the drama, says William Watts on MarketWatch. Argentina’s stocks make up less than 2% of the regional benchmark, which is weighted towards Brazil and Mexico.