By Hugh Bronstein
BUENOS AIRES, Oct 27 (Reuters) - Argentine leader CristinaFernandez's allies took a beating in Sunday's midterm election,shrinking her congressional majority, snuffing out chances of aconstitutional change to allow her a third term and kicking offthe contest to succeed her in 2015.
Voters chose half of the lower house of Congress and a thirdof the Senate in Sunday's midterm.
Re-elected in 2011 on promises of increasing state controlin Latin America's No. 3 economy, Fernandez's politicalcoattails were trimmed by inflation, clocked by private analystsat 25 percent, while heavy-handed currency controls and fallingcentral bank reserves have dented confidence.
"Seven of every 10 votes cast today went against thegovernment. This election was a triumph for the opposition,"said local political analyst Rosendo Fraga.
Candidates sponsored by opposition leader Sergio Massa wonthe House of Deputies' contest by a 10-percentage-point marginin the key province of Buenos Aires, according to exit pollannounced on local television.
Buenos Aires province is home to 40 percent of Argentina'spopulation and most of the country's agricultural output.
The Buenos Aires loss was expected to shrink the majoritythat Fernandez's allies have in Congress to just a few votes.
"Our majority in the House and Senate will continue,"Defense Minister Agustin Rossi told reporters.
Massa, the mayor of the affluent Buenos Aires town of Tigre,headed his own list of candidates for Congress and is seen as apossible, business-friendly presidential contender in 2015.
"Tomorrow, we start with a new political map," said BuenosAires mayor Mauricio Macri, another possible presidentialcandidate who promises a shift toward market-friendly policies.
Other exit polls announced on television showed Fernandez'scandidates losing in key provinces around the country.
Some legislators had said they wanted a constitutional amendment to allow the ailing president to run for a third term.But the poor showing by Fernandez's branch of the Peronist partyin Sunday's mid-term dashed those hopes once and for all.
To push through the legislation, they would need two-thirdssupport in both houses. If the exit polls prove accurate,Fernandez would not come close to achieving that level ofsupport for another run for the presidency.
Fernandez was unable to campaign for her congressionalcandidates since an Oct. 8 operation to remove blood that pooledon her brain after she fell and hurt her head in August. She isexpected to continue convalescing for another few weeks.
The surgery marked the latest in a series of health issuesfor the 60-year-old leader, including low blood pressure and athyroid tumor that also was surgically removed.
Speaking to local television, Fernandez's son, MaximoKirchner, declined to speculate on when his mother would returnto work. "She's OK. She's in a good mood," he said.
As expected, Massa beat his rival, Martin Insaurralde,Fernandez's handpicked Buenos Aires candidate.
Massa - who vows to fight crime, combat inflation andimprove farm profits - appeared well positioned to run forpresident. But Argentine history shows midterm victors arerarely able to sustain momentum and clinch the nomination.
A dark horse could appear within the next two years, as wasthe case with former President Carlos Menem, who burst onto thescene in 1989, and Nestor Kirchner in 2003.
Sunday was the third anniversary of the death of Kirchner,who was married to Fernandez, preceded her as president and setthe tone for her policies.
At play in 2015 is policy in one of the world's top grainsexporters as it struggles to keep up with rising world fooddemand and attract investment needed to exploit the vast VacaMuerta shale oil and gas formation in Patagonia.
Argentina's peso weakened past 10 to the U.S. dollar ininformal trade last week, widening its breach with the formalrate of 5.88 pesos per greenback. Central bank internationalreserves are at $34 billion, down from $43 billion in January.
But stocks and bonds have rallied on hopes ofmarket-friendly policy changes ahead.
The blue-chip Merval stock index is up nearly 50percent since the Aug. 12 midterm primary.
Sunday's vote also tested the support of presidentialhopefuls Julio Cobos, a Radical Party member from Mendoza;Hermes Binner, a socialist from Santa Fe; and Buenos AiresGovernor Daniel Scioli, an ally of the president despite hismarket-friendly views.
- Politics & Government
- Cristina Fernandez
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