Stuck in the middle: the Lavagna candidacy

Stuck in the middle: the Lavagna candidacy

Thereare two main front-runnersin Argentina'supcoming presidential election:the incumbent president, MauricioMacri, and his predecessor,Cristina Fernández de Kirchner (2007-15). Both suffer from high disapproval numbers and are viewed as polarising figures.•In this context, there is space for a viable third-way candidate in the October27th election to appeal to the voter bases of both MrMacri and MsFernández. A moderate member of the opposition Peronist party, such as the former economy minister, Roberto Lavagna (2002-05), could, in theory, take advantage of this voter disillusionment.

However, Mr Lavagna has many challenges ahead of him. He will need to present a set of policy proposals to address Argentina's many challenges, and convince other centrist Peronists to rally behind his candidacy to stand any change of making it to a second-round vote.

Reflecting these and other stumbling blocks,The Economist Intelligence Unit does not expect him to win. However, we will be watching developments within moderate Peronism closely in coming weeks as manoeuvring ahead of the August primary election gathers pace.

Mr Lavagna is known best for his stints as economy minister, under presidents EduardoDuhalde (2002-03) and NéstorKirchner (2003-07), when he led the economy out of a profound economic and financial crisis and conducted a major restructuring of the country's bloated sovereign debt (although it left Argentina in default for several more years). MrLavagna was a presidential candidate in 2007 after splitting with the Kirchners, but came in third with 17% of the vote and has since retired from active politics.

Early this year Mr Lavagna was thrust back in the limelight amid rumours that he was considering a run for the presidency. Talk of a Lavagna candidacy came amid signs that other moderate Peronist challengers, such as Juan Manuel Urtubey, the Salta governor, were failing to gain tractionwith voters, and in this environment, Peronist bigwigs such as MiguelPichetto, the Peronist Senate leader, quickly latched on to a Lavagna candidacy as a solution to moderate Peronism's challenge of finding a viable candidate.

Mr Lavagna has been coy about his intentions and has yet to confirm whether he will run, but he has nonetheless garnered the support of some important actors, including labour unions and some Peronist provincial governors. Opinion polls taken over the course of April suggested thatMr Lavagna could defeat both MrMacri and MsFernández in a second round, but he trailed them both in the first round by some distance, garnering between 10 and 15% of the vote.

Many hurdles to overcome

Despite the enthusiasm of some of his Peronist colleagues, recent opinion polls suggest that support for MrLavagna has stalled at around 10-15%, highlighting the many hurdles that his candidacy faces. Oneof them is name recognition. According to opinion polls, MrLavagna lacks name recognition with around 25% of the population (mostly younger Argentinians). This is not an insurmountable problem, particularly as MrLavagna has not started campaigning.

A trickier question is that of elaborating just what policies he would pursue amid an apparent reluctance so far to provide specifics. MrLavagna seems instead to be relying on good impressions of his tenure as economy minister, while emphasising the need for consensus among the country's most important political, social and economic actors on policies to restore growth.

So far only a few details on policy have emerged. A self-declared "progressive centrist", MrLavagna has stated that he is against MrMacri's drastic cuts to public spending during a recession, but he also opposes MsFernández's statist economic policies. Hehas also stated that he would prefer sector-by-sector productivity arrangements between unions and businesses rather than a broad labour reform. The former minister has also said that he would seek to renegotiate Argentina's US$57bn arrangement with the IMF, so as to space out payments. Broadly speaking, we assume that, policy-wise, MrLavagna would, for the most part, provide policy continuity. However, his challenge for now is to elaborate a clear programme that satisfies evident voter desire for a third option.

Peronist politicking

Looking ahead, another big challenge to Mr Lavagna's candidacy is his refusal so far to take part in the primary election on August11th with other centrist Peronists. Mr Lavagna has made it clear that he would like to be named as the centrist Peronist unity candidate before the primaries, allowing him to run directly against MrMacri and MsFernández(the primaries in Argentina are open, nationwide contests, which, apart from their formal purpose of selecting candidates, have developed into a sort of "trial run" for the election itself).

But it seems unlikely at present that all other candidates will step aside for MrLavagna. Oneof these is a former congressman, SergioMassa. MrMassacame in third in the 2015 presidential race with 21% of the vote, and although his support has since fallen notably, he still garners support of around 5-10% and has so far flatly refused to drop out in favour of MrLavagna. MrUrtubey, who has support inpolls of around 2-5%, has also indicated that he will contest the primary against Mr Massa.

If Mr Lavagna runs under a separatebanner to Mr Massa and Mr Urtubey, they will split the moderate Peronist vote and ensure that both MrMacri and MsFernández reach the second round. Sofar, this still appears the most likely scenario, although it remains possible that MrUrtubey will eventually throw his weight behind MrLavagna—and that MrMassa will throw his support behind MsFernández. Mr Massa has recently sent conciliatory signs towards MsFernández, leading to some speculation that he would like to run for governor of Buenos Aires province on her ticket. Itis also possible, however, that Mr Massa's is manoeuvring to gain support from the former president in case she decides not to run (MsFernández has not formally declared her candidacy yet, although we assume she is running).

Time is of the essence

The scope for political gamesmanship, however, is limited by upcoming electoral deadlines. Thedeadline forregistering party alliances is on June12th, and the deadline for registering candidates for presidential primaries is June22nd. Although the official primaries are not till August11th, MrLavagna will need to start campaigning well before if he is to make further inroads after stalling in the vote. MrLavagna's performance in the primaries will also determine the momentum that he has going into the first round of presidential elections in October. Atthis point, it is virtually guaranteed that the presidential election will go to a second round, and we believe that MrLavagna would definitely pose a much stiffer challenge to MrMacri (although the race would likely be too close to call) in an eventual run-off.

Mr Lavagna's candidacy could still be competitive. But time is of the essence. Sofar, it seems that the large number of Argentinians who reject the two main candidates will not have an appealing alternative. Given that a second-round run-off between MrMacri and MsFernández continues to be the most likely outcome, we continue to expect that such a race would ultimately hand MrMacri a second term. 

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