The political earthquake unleashed by the sudden resignation of a group of ministers responding to Vice-President Cristina Fernández de Kirchner was viewed by most observers as a major defeat for President Alberto Fernández. The logic, the argument went, was that Alberto was forced to accept a Cabinet shake-up he resisted, exposing the widely known secret that Cristina, rather than the president, is the true bearer of power in the ruling coalition, Frente de Todos. This interpretation was bolstered by a vicious letter written by the two-time former president and leader of the Kirchnerite faction within the ruling coalition, in which she directed her public anger toward Juan Pablo Biondi, the presidential press secretary and personal friend of Alberto, who later resigned his post. At the same time, Mrs. Fernández de Kirchner urged President Fernández and Economy Minister Martín Guzmán to quickly implement an aggressively expansive fiscal policy that is none other than what was budgeted in the original plan for 2021. Guzmán’s head was not on the chopping block, she assured the embattled minister, despite months of mounting pressure coming from sectors close to her son Máximo.
Rather than a show of strength, reality suggests Cristina is now in one of her weakest moments from the more than three decades in which she has been involved in politics. At the same time, it seems to indicate that the number one priority for the vice-president, who truly holds the strings — and the votes — within the governing coalition, is to win back as many votes in order to minimise the electoral defeat that’s coming in November. The wellbeing of society from a policy-making standpoint is secondary to the benefits it would reap from a Peronist government led, or at least held together, by Cristina.
The cabinet shake-up brought Tucumán Province governor Juan Manzur back from exile to become Cabinet chief, pushing aside Santiago Cafiero, who’d been coming under artillery fire for quite some time. Cafiero will now make his way to the Foreign Ministry, taking his deputy Cecilia Todesca along with him. Outgoing foreign minister Felipe Solá, meanwhile, found out he was being sacked while on an official mission to Mexico to accept the pro-tempore presidency of the Community of Latin American and Caribbean States (CELAC), bringing his turbulent term heading the portfolio to an end with one more scandal.
Manzur, like Alberto, is a former Kirchnerite official who turned on the Queen of Hearts, winning him a royal veto to form part of the original Cabinet back in 2019. He had publicly proclaimed the end of Kirchnerismo and the rise of Albertismo and was currently locked in a provincial struggle for absolute power with his deputy. Indeed, he had to negotiate a truce with help from Buenos Aires in order to take the job at the Casa Rosada, and is expected to go on a spending and announcement frenzy until the day of the election. Clientelism is a provincial specialty in Argentina.
Cristina’s public freakout pushed the ruling coalition to the edge of the precipice while sending jitters through financial markets. That CFK had to go to that extent and still ends up with Cafiero still in the Cabinet and Manzur in the hot seat seems to say a lot. Perhaps it has even given President Alberto some cojones, proving that he does hold some element of power (even if it is merely operational). Manzur represents a return to the league of governors who acted as a counterpart to Kirchnerism — along with Sergio Massa’s Renewal Front — in the Frente de Todos coalition’s original structure. Now, it may be Cristina’s only choice to shore up the provincial vote. In the populous Buenos Aires Province, Fernández de Kirchner forced her favourite, Governor Axel Kicillof, to backtrack and sack key members of his Cabinet ,including his own chief and personal friend Carlos Bianco. In came Martín Insaurralde, who left behind the mayorship of Lomas de Zamora in another key structural movement. Kirchnerismo now seems to acknowledge the importance of territoriality of the traditionalist Peronist bastion, with the “Barons of the Conurbano” now in play.
Not only was Cristina forced to acknowledge the power of the league of governors and Buenos Aires Province territorial bosses, she was also forced to accept the continued presence of Guzmán in the Cabinet. In her letter, the vice-president was explicit about the perceived incapacity to execute the Budget, asking Guzmán and Alberto to go on a spending spree in order to win back the electorate. Fortunately, it seems that Fernández de Kirchner understood that firing Guzmán would’ve pushed the markets over the edge, seemingly emboldening the young minister who went as far as to publicly contradict her. “Cristina says there’s been fiscal contraction, I say there’s been a reduction in the deficit,” noted Guzmán in a radio interview. He went even further, explaining that state expenditures grew in real terms and that higher tax revenue and the debt restructuring with the private sector allowed for the deficit to fall. (He forgot to add that inflation is running at more than 50 percent.) According to a report by consultancy Invecq, accelerating expenditure to match the deficit levels indicated by Cristina would mean an increase to the tune of 1.3 percent of GDP, requiring another 550 billion pesos in government spending. Let’s see how Guzmán can tackle inflation after that, if he’s still around.
Guzmán’s courage and President Alberto’s newfound heroism could be part of the ‘resistance’ against the onslaught of Kirchnerism within the ranks of the Frente de Todos. Indeed, the Casa Rosada finally confirmed media rumours Thursday that First Lady Fabiola Yáñez is 10 weeks pregnant, and some suggest it is part of a charm offensive after the disastrous impact of the ‘Olviosgate’ pictures of her birthday party in the hardest moments of the lockdown. The pregnancy would have been consummated two weeks before news of improper visits to Olivas began to circulate. With Manzur in charge of the campaign and the Cabinet, Insaurralde holding the fort in Buenos Aires Province, Guzmán dictating economic policy and Alberto running the show, Cristina is going all in, but she is also risking her political power within the ruling coalition. The self-inflicted costs of these moves have given the opposition ample breathing room, allowing them to take the backseat as the campaign has moved out of the spotlight. Only time will tell, both in November and in 2023, whether Cristina’s was another touch of genius, or an act of desperation.