The Argentina that 56-year-old mayor of Buenos Aires Mauricio Macri takes over as president is something of a poisoned chalice. The historic rejection by voters on Sunday of the Kirchner legacy – 12 years leadership by Nestor and his volatile widow Christina Fernandez – spells the end for now of Peronist rule, a nationalist brand of leftwing populism that has dominated the country's politics. And it ushers in, for the first time by democratic mandate, a right-wing government in a country where conservatives have historically ruled instead through the military.
But Macri faces formidable challenges in pulling Argentina, fast running out of cash, back from a recession that is widely blamed on Fernandez’s profligacy and the rash printing of pesos which is fuelling rampant inflation, now around 28 per cent. His economic challenges include above all resolving the stand-off with the “hold-outs”, bondholders who rejected a debt restructuring deal in 2005 – we call it “haircuts” – following Argentina’s 2001 default. They have fought a lengthy, still-unresolved battle through the US courts on the issue which is blocking the country’s return to global capital markets.
Macri needs to be able to access international finance if he hopes, as he has promised, to relax capital controls and trade restrictions and to restore investor confidence, all key to spurring renewed growth. He will at the same time have to walk a fine line between the neoliberal policies with which he is associated and the campaign promises he made not to jettison popular Kirchner/Fernandez social programmes, particularly subsidies to poor families. He has also promised to keep key companies like the airline and oil giants in his country nationalised.
The election also promises to open possibilities of bringing Argentina back into the mainstream of regional politics from increasing isolationism. A new relationship with Brazil may help reinvigorate the regional trade alliance Mercosur, while Macri has promised to improve Argentina's strained ties with the US and to review a contentious deal with China to build a nuclear reactor.