SPECIAL REPORT - Widowhood, Peron nostalgia and Argentine politics

BUENOS AIRES Tue May 10, 2011 6:04pm IST

An inflatable balloon representing Argentine icon Eva Peron is displayed in front of the Presidential Palace during the wake of former President Nestor Kirchner in Buenos Aires October 28, 2010.  REUTERS/Andres Stapff/Files

An inflatable balloon representing Argentine icon Eva Peron is displayed in front of the Presidential Palace during the wake of former President Nestor Kirchner in Buenos Aires October 28, 2010.

Credit: Reuters/Andres Stapff/Files

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BUENOS AIRES (Reuters) - Still dressed in black six months after her husband's death, Argentine President Cristina Fernandez has a heavy burden to bear.

Fernandez, who succeeded her husband Nestor Kirchner as president four years ago, carries the hopes of die-hard supporters who want her to run in October's presidential election and deepen the leftist reforms he began.

Occasionally tearful, she refers wistfully to Kirchner as her "life-long companion" in near-daily speeches in working class districts around the capital where the couple's backing is strongest.

"A dream began eight years ago. Today it isn't just a dream, it's a reality we need to build on," she said recently.

The dream is "Kirchnerism," an idiosyncratic blend of interventionist economic policy, the championing of human rights and nostalgia for the heyday of another husband-and-wife team that dominated Argentine politics, General Juan Peron and Evita.

Fernandez, 58, has staged a remarkable recovery in the polls, which give her an approval rating of about 50 percent. Widowhood has endeared her with voters who have seen a softer side to her combative character.

At the same time Wall Street has been disappointed in hopes that the investment climate would improve in Argentina with Kirchner out of the picture. On the contrary, Fernandez has imposed price controls, reinforced state influence on private companies and taken other steps that have unnerved the business community.

But Cristina, as she is commonly known, is keeping the nation -- and the financial markets -- guessing.

It may be a ploy to whip up a clamor for her candidacy, although some commentators suggest she may be having doubts due to family pressures or health concerns.

Deeply mistrustful of the media, journalists have not been able to quiz her over her plans, and until she confirms whether she will seek re-election on October 23, the "will she, won't she" speculation will intensify.

Everything, however, suggests she will.

In the streets of Buenos Aires, "Cristina 2011" is daubed across walls and bus shelters. Smiling campaign posters pair her in a myriad of possible alliances with wannnabe mayors or provincial governors hoping to ride on the coattails of her surge in the polls.

Allies vouch for her candidacy and say the splintered opposition is floundering.

"There's no one who can replace her right now. She's completely aware (of that) and she's used to being in power, she's not some little princess in a tutu ... there's no doubt she'll run," said congressman Jorge "Pampa" Alvaro, who met Fernandez and Kirchner when they were idealistic law students in the 1970s.

The odds are stacked in her favor. The opposition is struggling to forge an electoral alliance strong enough to pose a serious threat to her and Latin America's No. 3 economy is growing at one of the world's briskest rates.

Unemployment is near a 20-year low and consumer confidence rose to a record high in March this year, according to a monthly index produced since 2004 by TNS Argentina and the Catholic University in Buenos Aires.

Fernandez's supporters say you cannot ignore such numbers, and some polls suggest she would get enough votes to avoid a run-off election.

Backers highlight progress on expanding pensions coverage, child welfare benefits and the construction of schools and homes. Some demand deeper reforms, such as a trade union-backed bill that would force companies to share their profits.

"We're on the way to achieving the '50-50' (split of wealth between workers and companies) that Peron and Evita strived for," union boss Hugo Moyano said in a Labor Day speech, urging Fernandez to run so Peron, Evita and Kirchner can "rest in peace."

But Fernandez's detractors say antagonistic policy-making, high inflation and prickly ties with big business will sooner or later stymie the boom and blacklist the country for good among investors.

"As a result of (the government's) authoritarian practices, we're living through one of the worst moments in democratic times," said Buenos Aires Mayor Mauricio Macri, leader of a center-right opposition party.

RETURN TO THE FOLD

When Kirchner died of a heart attack at the couple's Patagonian retreat in October, Wall Street investors celebrated, looking forward to Argentina's prompt return to the fold.

It is not the first time they have been wrong on Argentina. This time, investors misjudged Fernandez and the mood in the country, expecting her to moderate her confrontational approach toward business or slide irreversibly in the polls.

Kirchner's death led the couple's harshest critics to anticipate the descent of "Kirchnerism" into political oblivion. Some said his sudden departure left her isolated, both in private and in public; a political widow, the reluctant heir of his murky legacy, with only a tiny circle of trusted aides.

The influence of Kirchner on her administration was so strong even allies acknowledged a kind of "dual command," and it is unclear who has stepped into his shoes, particularly as her chief power-broker and economic adviser.

So far, things have not gone as their enemies expected.

Nostalgia for the best years of Kirchner's 2003-2007 presidency, and an outpouring of sympathy for a woman who suddenly seemed more likable, have helped Fernandez recover.

"It's as if being widowed has made her more human, even in how she relates to the public," said Olga Wornat, author of a biography about the president who also knows the Kirchners from their student days.

Though her husband's death robbed Fernandez of her closest adviser, who battled behind the scenes to shore up support for his wife from the kingpins of the fractious Peronist party, it gave her an opportunity to step outside of his shadow.

The widely held view that he was calling the shots dogged her from the start, especially during an acrimonious dispute with the country's farmers over soy taxes in 2008.

At that time Fernandez's approval rating fell to its lowest point, about 20 percent, as voters rejected her antagonistic handling of the conflict.

But against the odds, she recovered, something few leaders have managed once the electorate has become disenchanted.

"She's much more her 'real self' now. She's grown into the job, and then with Kirchner's death she had ... to assume the leadership," former Economy Minister Martin Lousteau, who quit during the farm conflict, said in an interview with a local news website.

Fernandez's fiery tone, which critics find haughty and peevish, has softened. In the weeks after Kirchner's death, she showed a few signs of greater pragmatism, even reaching out to Kirchner's arch foe -- the International Monetary Fund -- for help to design a new consumer price index.

Wall Street's hopes for a change of course were quickly dashed, however.

In the past six months, she has cranked up pressure on the private sector with fresh price controls to battle double-digit inflation, tighter import curbs and a decree to beef up the state's presence on company boards in which the ANSES pensions agency holds a stake.

Fernandez had already stunned the private sector in late 2008 by pushing the nationalization of private pension funds, a step that handed ANSES stakes in more than 40 Argentine companies.

Such measures infuriate hostile business leaders and conservative newspaper columnists, who like to draw parallels with Venezuela's Socialist President Hugo Chavez. But they go down well with many voters, who blame the 2001-02 crisis on the free-market economic policies embraced in the 1990s.

Argentines with memories of the hyperinflation of the late 1980s and the devastating crisis 10 years ago have good reason to think things could be far worse than they are today.

"The current model works in as much as we don't have scares like we did in the past. There aren't runs on the banks or corralitos (account freezes) like in 2001," said Carmen Arcidiacono, 48, a local government worker out window-shopping in downtown Buenos Aires.

MAKE-UP

The president's own penchant for shopping, heavy make-up and glamorous clothes rarely goes unnoticed, something she tires of having to justify.

When asked in a rare 2008 interview if she had a pair of shoes for each day of the year, Fernandez said: "Do I look like a centipede? Kirchner never gets asked how many suits or ties he has."

Critics seize on her glitzy style, but it is surprisingly uncontroversial among the poor and her leftist supporters.

"She'll put her glasses on twenty times and keep taking them off again every time she raises her head because she doesn't want her picture taken with glasses on," said Hebe de Bonafini, leader of the human rights group Mothers of the Plaza de Mayo, which fought to expose the state's killing of dissidents during the 1976-1983 "Dirty War" dictatorship.

Kirchner and Fernandez have championed human rights and have warm ties with the Mothers and the Grandmothers group, which seeks to reveal the identities of babies stolen from dictatorship-era political prisoners.

Some commentators have questioned Fernandez's decision to wear black in mourning, a tradition long abandoned in Argentina, describing it as a vote-winning ploy.

Despite some doubts about her candidacy, Fernandez looks like she is in campaign mode, highlighting a sustained bonanza in the economy, which has enjoyed current Chinese-style growth rates for most of the last eight years apart from a slowdown in 2009 amid the global crisis.

The country's economic recovery is indisputable.

Unemployment was running at more than 15 percent when Kirchner took office in 2003 and has edged lower since then, dipping to just 7.3 percent in the fourth quarter of 2010.

Gross domestic product rose 65 percent between 2003 and 2010, while exports rose from $30 billion to $68 billion over the same period, partly due to steady demand for the country's soybeans, wheat and corn.

A competitive exchange rate has helped rejuvenate industry and farm exports, restoring some of the country's early 20th century glory as the "breadbasket of the world" and revitalizing auto production.

"If it wasn't for the things that have happened to me, I think I'd be the happiest person in the world seeing all the things we're doing now, things we thought about doing as youngsters," she said in a speech last week.

She repeats a similar line almost every day at supporter rallies and while announcing public works projects. It is her preferred way of talking "directly" to the people.

But storm clouds started gathering over the couple's economic policy mix early in Fernandez's presidency, notably inflation and the scandal over accusations of government meddling at state statistics agency INDEC to hide price rises.

Kirchner replaced the head of INDEC's price unit with a political ally in 2007, and government inflation data has come in far below private estimates ever since. That has obscured real poverty levels and dumbfounded Wall Street economists, who have cast doubt on the accuracy of other economic numbers too.

Fernandez's failure to address INDEC's low-balled inflation data, which has saved the country money on inflation-indexed debt repayments, has undermined her pledges to strengthen state institutions.

She avoids the thorny issue of inflation, blaming opportunistic retailers and announcing initiatives such as the "beef for all" campaign, which put mobile butchers on the streets to sell cut-price steaks in poor neighborhoods.

Inflation estimated privately at about 25 percent could prove her Achilles heel if she wins a second term. Economic analysts say the next government will have to tackle it by taking possibly painful tightening measures, but Fernandez is highly critical of orthodox recipes that might cool the economy.

MIDDLE-CLASS FAMILY

While many Argentine politicians hail from political dynasties, Fernandez was raised in an ordinary middle-class family in a suburb of La Plata, near the city of Buenos Aires.

Her mother, a Peronist, still lives in the modest family home. A huge Cristina campaign poster hangs in the driveway alongside a Gimnasia soccer club banner, while a plain-clothed policeman keeps watch outside.

But Fernandez has never been the "girl next door" that her background suggests. Wornat tells in her biography how she was a restless and ambitious student.

That may be why the gawky Kirchner caught her eye in the drafty corridors of La Plata University's law school. Kirchner was more involved in militant student politics and had assumed a natural prominence.

The couple married quickly and moved to his Patagonian homeland as political violence escalated in the run-up to the military coup of 1976. In the south they worked as lawyers, building a property rental business and a career in local politics.

Kirchner became governor of oil-rich Santa Cruz province while Fernandez served as a provincial lawmaker and later a national senator. Some commentators later dubbed them Argentina's Bill and Hillary Clinton.

An outspoken member of the upper house, Fernandez was far better known than her husband when he was elected as president in 2003 on the ashes of the country's devastating economic and political crisis.

When Kirchner took office, billing himself as a moderate whose priority was to get the economy back on its feet, some people thought Fernandez would be calling the shots.

A U.S. diplomatic cable from 2005 gives a glimpse of her influence, telling how Kirchner originally accepted an offer to be cabinet chief to Eduardo Duhalde, his predecessor as president and a former ally.

"After discussing it overnight with Cristina, who felt it was a bad political move, Kirchner called Duhalde back the next day and turned it down," the cable says, citing a businessman close to Kirchner. The cable is among a batch of State Department documents obtained by WikiLeaks and given to Reuters by a third party.

Her influence did not, however, extend to advice on economic policy, the cable said, and others say Kirchner almost always had the last word.

"He was the architect of all this. She gave her opinion on the basis of what he proposed," said Jorge Canales, a journalist from Santa Cruz who closely covered Kirchner in the 1990s. "He was obsessed with politics. It was politics for breakfast, lunch, tea and dinner," Canales said.

'THANK YOU'

Financial markets never forgave Kirchner for the tough 2005 restructuring of some $100 billion in defaulted bonds, which saw creditors walk away with hefty losses. But such policies went down well with crisis-weary Argentines, helping Fernandez to an easy election win to succeed her husband in 2007.

As thousands queued to catch a glimpse of his coffin last year, many supporters tied notes reading "Thank You" to the railings of the pink presidential palace.

"Kirchner's death left a huge gap, but it also showed us things we hadn't realized, like that fact that there is a generation of young people ... who are aware of the changes he put in motion," said Estela de Carlotto, head of the Grandmothers rights group.

A Kirchnerist youth group called La Campora, founded by the couple's son Maximo Kirchner, has risen to prominence in recent months although the true extent of its influence on policy-making is hard to measure because, like most government figures, its members rarely talk to the media.

"We're completely banned from speaking to journalists," one group member said when approached to comment.

Members of La Campora, whose leaders include the president of the state-run airline, are leading a post-Kirchner propaganda drive reminiscent of Peron and Evita's late 1940s heyday.

Stylish stencil designs depicting Fernandez and Kirchner have sprung up across the capital.

Kirchner has been given a make-over as the "Nestornauta," a play on the cult comic book hero El Eternauta who travels eternally through time, and town squares and roads are being hurriedly named in his honor.

Maximo Kirchner was mentioned as a possible political heir, but he has continued to shun the limelight since his father's death, choosing to stay in Patagonia, Wornat said.

Local media say he is in charge of looking after the family's real estate holdings, which include a boutique hotel next to their house in El Calafate that Fernandez herself helped design.

The Kirchners' multimillion-dollar fortune and property holdings, which have grown substantially since 2003, face close media scrutiny. Allegations of corruption have stalked the couple and several key allies for years, although there have been no convictions.

A leaked 2009 U.S. embassy cable includes blunt criticism of government efforts to tackle money-laundering. "The Kirchners and their circle simply have too much to gain themselves from continued lax enforcement," the cable reads.

But under pressure to meet global standards, the government is pushing a law through Congress to toughen money-laundering legislation and Fernandez has responded to graft allegations by saying "few have been so transparent" about their finances.

WILL SHE, WON'T SHE

By law, Fernandez must make the decision on whether to run by June 25.

Pressure from her family and concerns over her health may weigh on the decision. Fernandez suffers low blood pressure and has canceled several recent engagements, including an official visit to Mexico. The presidential no-shows are providing ample fodder for the rumor mill at home.

It is not the first time her health has been in the spotlight. Possibly in response to a news magazine report about Fernandez's mental health, Hillary Clinton quizzed embassy staff over whether Fernandez took medication and how she coped with stress, a leaked 2009 diplomatic cable showed.

Apart from personal issues, second terms in office are notoriously tricky at the best of times. Kirchner's fear of the second term led him to make way for his wife, some political analysts say. Fernandez's own jitters could run even deeper, knowing she has no clear successor and that allies' attention will quickly turn to the presidential election of 2015.

"I can't imagine what it's been like for her, losing her life-long companion. In light of that, there is a possibility (she won't run)," former Cabinet Chief Alberto Fernandez, who used to be a member of the Kirchners' inner circle (but is no relation), said in a recent television interview.

"It must be a difficult decision for Cristina."

In the end the calculation may come down to this: there is no other obvious candidate to shoulder the responsibility of taking the couple's political project forward.

As James Neilson, a political analyst and columnist generally critical of the government, puts it: "She's aware of the fact that all her supporters are totally reliant on her, because without Cristina, Kirchnerism would be nothing."

(Additional reporting by Kristina Cooke in New York; Writing by Helen Popper; Editing by Claudia Parsons and Jim Impoco)

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