Kirchners Face Uncertain Future

Article excerpt


When Cristina Kirchner won Argentina's 2007 presidential election, she was taking over the onice held since 2003 by her husband, Nestor Kirchner. Observers speculated the couple could alternate power for years to come. However, the country's June elections may have upset the couple's dream. The ruling Peronist party lost control of both congressional houses, raising the possibility that the Kirchners may have to pull back from their populist agenda in order to cling to the presidency. That prospect unleashed a market rally.

With the administration facing limited financing sources, coupled with increased capital flight, there are mounting concerns over its ability to service the nation's debt.

Venezuelan president Hugo Chávez has almost singlehandedly kept the Argentine economy afloat by purchasing several billion dollars worth of sovereign paper, as the Argentine government remains excluded from international capital markets as a result of its $100 billion debt default in 2001 . However, tower oil prices have constricted Chavez's supply of petrodollars. …