For the first time in the Kirchner era, the Ks will have to face a seriously adverse external economic environment. Although they have tried to deny it once and again, twice in the past 10 days has Mme President said, in her shy and subtle terms, that Argentina will be affected by the global credit crisis.
This is a new phenomenon and as such, has had a double effect: one, the opposition is gathering and waiting with great expectation the outcome of the crisis and its impact on inmediate government strength (heavily impacted after the tax revolvt which lasted March thru July), and second, the Ks themselves are wondering how good a storm pilot either of them is! This is because the external conditions which Mr. Kirchner inherited from his then-godfather-now-adversary Duhalde had been the most favorable in more than 50 years - and a downturn was not in any of their plans.
This will place extra pressure on the fiscal accounts, bearing in mind that 2009 is an election year and as such, there is increasing pressure to release funds instead of increasing savings on public works. This, again, will be a stress test to the Ks real political power, that had virtually not been challenged since the farmer's revolt.
2008 will be a make or break year for the Kirchners: if they survive a year with 4 months of tax revolts and now extremely adverse (and worsening) economic conditions, it might mean they will be around for a while. If the response to the global crisis - which due to the lack of credit in Argentina will be mainly felt through a fall on export demand and an increase of imports - is not as sound and ccoherent as expected, we might well end up with the longest lame (female) duck in history ...
