BUENOS AIRES, Argentina—President-elect Alberto Fernandez and exiting leader Mauricio Macri met on Oct. 28 to find a way to smooth the tricky political transition, with the left-leaning Peronists set to return to Argentina’s presidential palace in December.
The hour-long meeting over coffee, after Fernandez won a decisive victory in an election on Oct. 27, is something of a peace offering amid an economic crisis that has hit Argentina’s nearly 45 million people and pushed the country toward default.
How Macri and Fernandez work together over the next few weeks ahead of the new government taking office on Dec. 10 will be key. Argentina is set for talks with creditors over $100 billion in debts, reserves are dwindling, and inflation is sky-high.
The two leaders didn’t speak to the media after the morning meeting in the Casa Rosada, but Treasury Minister Hernán Lacunza said at a press conference that the two had shared a “good dialogue.”
Fernandez, a Peronist, had been a heavy favorite to oust Macri, a conservative, after winning a landslide victory in primaries in August. Oct. 27’s result shifted Latin America’s No. 3 economy firmly back toward the left.
The president-elect faces a major challenge to revive Argentina’s economy, mired in recession for much of 2018, while fending off a rising mountain of debt payments amid concern the country may be forced into a damaging default.
Investors, who have been following the twists and turns of the election closely, will be on the lookout for signs from Fernandez about his likely economic policies, the make-up of his economic team and the role of his fiery vice presidential running mate, Cristina Fernandez de Kirchner, who was president from 2007 to 2015.
The country’s farm sector—the main driver of Argentine exports—is also watching for signs of how the incoming president will approach the sector, with some worried he will usher in more protectionist measures.
The Argentine peso was about 1 percent stronger on Oct. 28, while trade in the black market was volatile, with the price jumping around after the central bank tightened controls on currency purchases in the early hours of the morning.
Argentine over-the-counter bonds dipped 1.6 percent on average, while the country risk index climbed 100 points.
Argentines find the country headed in a likely different direction after the almost four years of Macri, who tried to drive market reforms, but was scuppered by a sharp downturn in the economy since 2018.
“The truth is that I am happy with the change, we did not want to keep going with the same government and hopefully things change a bit now for everyone because it was bad,” said Ramora Perez, 61, in Buenos Aires.
Argentine officials are preparing for tough negotiations with creditors over $100 billion in sovereign debt that has become painfully expensive for the country.
By Adam Jourdan