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Source: Financial Times
By: John Paul Rathbone and Benedict Mander

When Pope Francis held an audience with Cristina Fernández in March, his first with any head of state, the meeting of the two Argentines was a study in contrasts. While the former was serene and dressed in white, Ms Fernández wore widow’s weeds and appeared coquettish, her eyes circled in kohl.

“Oops, can I do that?” she said, touching his sleeve and giggling like a schoolgirl. “I never imagined I would meet the Pope,” she mumbled, crossing her hands across her chest.

It was an unusual show of humility from a politician known for her imperious style and sharp tongue. As she once said: “The only thing to fear is God – and me a little, too.” But this week Ms Fernández was cast in another unfamiliar role: that of invalid.

Following a bump to her head two months ago, Ms Fernández, 60, was diagnosed with blood on the brain and rushed to hospital. Although this is a routine procedure, her forced exit has provoked a near constitutional crisis and brought Argentina’s problems to a climax worthy of an Almodóvar movie.

Ms Fernández’s populist model, part of the region’s “pink tide”, is receding. The Asian-driven boom in commodity prices, which has powered Latin America’s third-biggest economy for a decade, is ending. Ignored by world leaders – delegates at last month’s Group of 20 leading nations meeting in St Petersburg unplugged their headphones as she spoke – her popularity has also slumped at home. Ms Fernandez’s frequent migraines and delicate health have led some to wonder if she is a “woman on the verge of a nervous breakdown”.

The debut of this bus driver’s daughter on the world stage, when her husband, Néstor Kirchner, unexpectedly won the 2003 election, was almost as dramatic. They met as law students, and before entering politics shared a legal practice recovering foreclosed properties – the perfect background in a country that had defaulted on $100bn of bonds.

As president, with Ms Fernández at his side, Mr Kirchner imposed a debt restructuring on creditors and pumped subsidies into energy, health and education. The pair took on the country’s biggest interest groups, from media companies to judges to the farming lobby; railed against imperialism; and redoubled Argentina’s claim to the Falkland Islands, the British territory in the South Atlantic. Tankers laden with soya destined for Asia, meanwhile, raised economic growth to Chinese rates. Poverty fell rapidly. Wrapping themselves in the memory of Juan and Evita Perón, the populist founders of Argentina’s idiosyncratic nationalist movement, they hatched a plan to rule indefinitely by alternating the presidency.

So was born what the Kirchners named the “model”, and the start of what Ms Fernández calls “the glorious decade”. It might be better described as a run of good luck now apparently ebbing.

One constant in Argentina’s history is its inability to manage a boom. Today, inflation is estimated at 25 per cent, and currency controls and general maladministration have sapped the economy. Indeed, not even ministers believe the official inflation numbers. Last year’s expropriation of Spanish oil company Repsol’s majority stake in national energy company YPF has drained business confidence. A battle with holdout creditors has shut the country out of financial markets.

As with so many populist regimes that extol the “people” but favour secrecy and personal power, graft and sweetheart deals have flourished. “I’ve never seen this degree of corruption,” says Argentine journalist Jorge Lanata, who fronts a muckraking television show. “What most angers me is them talking as if they were Mother Teresa.”

Any plans Ms Fernández had for dynastic rule collapsed with her husband’s death from heart failure three years ago, before her second term. The public displays of emotional volatility, which prompted Hillary Clinton, then US secretary of state, to inquire in cables revealed by WikiLeaks about Ms Fernández’s “mental health”, have subsided. But not her isolation. Insecure and bereft of her husband’s counsel, she finds her inner circle has shrunk to just a handful, in particular, Máximo, 36, the elder of her children and her only son. “In our government what is important aren’t the cabinet meetings, but the things we have done,” she said in a recent interview.

That lack of institutionality now haunts Argentina as the president recovers from an operation expected to require a month’s rest. Constitutionally, Amado Boudou, the vice-president and Harley-Davidson enthusiast, is in charge but tainted by a corruption scandal. “The only person in power is the president,” said cabinet chief Juan Manuel Abal Medina this week, even with Ms Fernández in intensive care.

With midterm elections on October 27, in which Ms Fernández’s party (a breakaway Peronist faction) is expected to lose its congressional majority – followed by 2015 presidential elections for which she cannot run – Peronists are is deserting her. “We love a sweet flower, but not one headed to the political graveyard,” says one. The prospect of a more business-friendly administration is enticing investors, particularly to Argentina’s vast, recently discovered shale gas reserves. “Do you think Chevron would have embarked on its $1.2bn investment in July if it didn’t see the writing on the wall?” says one.

If Ms Fernández is true to form, she will emerge from hospital vengeful and valiant. Yet some note a new softness since she met the Pope – he sent her a get-well telegram this week – and her excitement at the possibility he might baptise her first grandchild. That, plus her fading political fortunes and health, could prompt a change of heart, or even retirement.

“I’d love to be a judge after 2015,” she said recently. The comment was made ironically but, judging by the local stock market – up 75 per cent this year – it is a hope many share.

The writers are Latin America editor and Buenos Aires correspondent for the Financial Times

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