On Sunday, June 28, Argentines went to the polls for the mid-term congressional election, and changed the entire political scene by definitively shifting the balance of power away from the Kirchners and the Partido Justicialista (PJ). Half of the 257-member Chamber of Deputies was up for reelection, as was a third of the Senate. The PJ had a simple majority in both houses before the elections, but after losing a crippling number of seats, they no longer have a majority in either. These developments will force president Cristina Fernández de Kirchner, known to all simply as “Cristina,” to rely—by necessity—on ruling by structurally entering into a coalition with other parties.

The ruling PJ is a descendant of the Peronist party founded in 1945 by Juan Perón. It is a member of the ruling coalition Frente para la Victoria (FV) which enjoyed an absolute majority in both the Senate and the Chamber of Deputies for the last six years. This enabled the PJ to successfully pass policies needed to deal with the inherited economic crisis from previous presidencies. Cristina Kirchner’s presidency follows upon that of her husband Néstor, and their rule—often called Kirchnerismo—has set the political tone for the country for more than 6 years.

Election Day
With the majority of the votes counted in the heavily populated Buenos Aires district, in the most high profile congressional race in the country, Néstor Kirchner conceded defeat to opponent Francisco de Narvaez, a millionaire businessman from the center-right party, Unión Pro. The loss is extremely debilitating for the Kirchners and for his faction of the Peronist party in general. The district was always considered a Peronist stronghold, and its reversal in preference signals a drastic weakening in the PJ’s ability to keep its traditional electorate intact. Furthermore, Néstor Kirchner’s inability to beat Narvaez was a blow to his political clout, as his run represented an unsuccessful attempt to re-consolidate the PJ’s power. His humiliating defeat however, proved that the public was no longer in favor of the Kirchner dynasty, essentially killing any hope, at least for now, that Néstor Kirchner could count on for a second presidential run in 2011.

This mid-term election was seen by some as a preface to the 2011 election, and as more of a battle of personalities than ideologies or policies. Many viewed the vote as a referendum on the Kirchners themselves, and their incapacitating defeat on June 28 was the final blow to their ballot credibility. Kirchner had warned that his loss and the overall defeat of the PJ in all of the congressional races could drag Argentina back into the economic vacuum brought on by the 2001 crisis. That vague semi-threat was representative of his entire campaign style. Relying heavily on his status as a former president, Néstor Kirchner seemed to have run more with the intention of electing a PJ majority than himself as a representative of the lower house. Throughout most of his campaign, rather than providing an explanation of how he as a Deputy would serve the people, he arrogantly tried to insist that it was either his party’s way or chaos. His arrogance in stressing his former political accomplishments rather than solidly canvassing for the position ultimately proved detrimental to his campaign, inexorably resulting in his defeat.

A Series of Unfortunate Events
This catastrophic political reversal was not entirely unforeseen. Under Néstor Kirchner, the economy was able to make a remarkable reversal from its turn-of-the-century downturn, thanks in large part to the macroeconomic policies of Economic Minister Roberto Lavagna, such as restructuring its considerable external debt. Under Néstor Kirchner’s leadership, Argentina’s GDP rose from $391 billion to $575 billion in just four years. This turnaround made Argentina the fastest-growing economy in the Western hemisphere for more than five years. Understandably, the same type of economic performance was expected during Cristina Kirchner’s presidency; she was elected with the assumption of a continuation of her husband’s policies and an anticipation of the success that they brought. However, frequent battles with Argentine farmers over export taxes and a general economic downturn led to a dramatic drop in her popularity to a paltry 30 percent, according to several polls.

Overall production in the country has been dwindling over the last 5 months, and high inflation has curtailed the tourism industry that previously thrived when the Argentine peso was weaker in comparison to the euro or dollar. Unemployment has also been on the rise, and is officially at 8.4 percent, which can be attributed in part to the global economic downturn. Although some economists predict that Argentina will slip into a recession this year, President Kirchner forcefully has stated that there is “no way” it will contract.

The Kirchners have traditionally been characterized as fierce politicians who are unwilling to compromise the pursuit of their agendas. Although they experienced towering successes in earlier years and were greatly lauded for their political prowess, an increasing number of Argentines have become cynical towards the seemingly autocratic dynamic duo, whose tough policies during a series of economic hardships have managed to alienate many. It is assumed that Cristina Fernández de Kirchner will not be easily “backing off her convictions” in policy-making, says Alberto Ramos, a senior Latin America economist for Goldman Sachs. Still, recently Cristina Kirchner’s government has been acting out of character, offering talks with the opposition to help reconcile the country’s political direction. Whether or not this is indicative of a true change of heart for the Kirchner administration is uncertain. Talks demanded by the opposition to address social and economic reforms have been largely ignored, lending credence to closeted allegations of the country’s statistical agency (INDEC) intentionally ‘modifying’ inflation statistics, thereby further enraging disgruntled farmers.

It seems for the time being, Kirchner’s administration has successfully distracted the media by taking an active role in supporting Zelaya and demanding his reinstatement in Honduras. However, before long they will have to face the inevitable, and begin political negotiations just at the time that their prospects are faltering.

Political future of the PJ
Kirchner’s congressional walloping leaves Argentine politics in disarray, with a battered party trying to revive itself from becoming scarcely more than a faction, and an embarrassed, if not humiliated president in danger of becoming a lame duck. While the left-leaning coalition Frente para la Victoria is still the dominant power in congress, the PJ has been weakened enough that it does not currently have very good prospects for remaining in the Casa Rosada after the 2011 elections. The Kirchners, once the golden couple in the country, have now been virtually discharged from national politics. The PJ instead must spotlight a new crop of fresh political faces to associate with the PJ. Otherwise, the party will continue to fade. Néstor Kirchner has already begun this process, as he “irreversibly” resigned the position of head of the PJ on June 29, turning it over to Buenos Aires governor Daniel Scioli. This strategic move was necessary to help his party to reunite and rally behind new leadership, as the vote on Sunday clearly expressed their desire to do so. Now, if the PJ is to be resuscitated, its future credibility will have to ride on the second half of Cristina Kirchner’s administration.