Leftist Alberto Fernandez wins Argentina elections; markets, investors jittery

The protectionist regime under Fernandez comes even as Argentina is battling a continued recession and credit crunch.

Alberto Fernandez
Leftist Alberto Fernandez wins Argentina elections; markets on edge Presidencia de la Nación / Asunción de secretarios de Jefatura de Gabinete -- Wikimedia Commons

Alberto Fernandez has won Argentina's presidential election, ending the rule of the conservative incumbent Mauricio Macri. The first-round triumph of Fernandez, a leftist leader, marks the end of centre-right government in the South American country. Ex-president Cristina Kirchner, who was Fernandez' running mate, will become the vice-president.

The markets were, however, jittery as the 60-year-old Peronist was elected to power. The protectionist regime under Fernandez comes even as Argentina is battling a continued recession and credit crunch. Market participants fear that Argentina under the protectionist Pernoist regime could possibly default on a US$57 billion IMF loan, the Agence France-Presse reported.

"The markets will be negative ... "It won't be as brutal as in August (after the primary result), but people are taking their money out of the country, out of the banks," " Nicolas Saldias, a senior researcher at the Wilson Center, told the agency after the Fernandez triumph on Monday. The incoming president ran a hard campaign almost wholly focusing on economy.

When Fernandez, a known critic of multinational companies, scored an emphatic win in the primaries in August, spooked investors started withdrawing money from banks. They have withdrawn some $12 billion so far. However, Fernandez has pledged not to cause an IMF default under his watch, even though he is a fierce critic of the high levels of debt taken on under Macri. During the last week of the election campaign the Argentine peso fell 5.86 percent.

"It will not be difficult to do something similar to what Uruguay did, I have talked to international investors ... We will do what we always did, which is to fulfill and honor debts, but do not ask us to do so at the cost of further deterioration of our people," Fernandez said earlier.

When 94 percent of the votes were counted late on Sunday night, Fernandez had 48 percent of the votes. He needed 45 percent votes to register an outright first-round victory. "It's a great day for Argentina," Fernandez told reporters. Fernandez will take over as President on December 10. Outgoing president Mauricio Macri said he phoned Fernandez and invited him to breakfast.

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