It might as well be said now: the outcome of the midterm elections, scheduled for June 28, will most likely leave a bittersweet taste in the mouths of both the ruling party and the opposition. The ruling Peronists are expected to score a symbolically-important win in Buenos Aires province, where the party's list of candidates to the Lower House is headed by former president Néstor Kirchner.

But the Peronist party, which is headed by Kirchner, is likely to lose control of the Lower House of Congress, leaving it at the mercy of the opposition. Kirchner's electioneering, which seems to be working in Buenos Aires province where Governor Daniel Scioli is also a candidate, has gone wrong in other major provinces. The Peronist party branches of Córdoba and Santa Fe have openly defied Kirchner's authority as party leader and have said they will not be part of the ruling party Lower House caucus after the elections.

The problem for the opposition is that until recently, because of the crippling effect the conflict with the farmers in 2008 over export duties had on President Cristina Fernández de Kirchner's popularity, it really did look like the ruling party could lose in Buenos Aires province, its stronghold. Or at least that's what some analysts were telling the opposition. But was this a miscalculation all along?

Polls show that Kirchner, the President's husband, holds a lead of at least three- to five-percent over his nearest rival, dissident Peronist Francisco de Narváez of the centre-right opposition coalition Unión-PRO. De Narváez, a wealthy businessman gladly bankrolling his own campaign, is still a real challenge. He is backed by City of Buenos Aires Mayor Mauricio Macri, the head of PRO, who is popular in Greater Buenos Aires because he was the chairman of Boca Juniors football club. But De Narváez's campaign has hit turbulence.

Felipe Solá, the dissident Peronist who is second on Unión-PRO's list, has criticized his party's spin-doctors who had initially left him out of television ads in a bid to reach out to independent voters who dislike the Peronist party machine that is dominant in Greater Buenos Aires. De Narváez and Solá have said once again that all is well between them. But the body language is strained and talk of a rift hasn't done the campaign any good.

To make matters even more complicated Macri reportedly also got into an argument with his former deputy mayor Gabriela Michetti, who heads PRO's list of Lower House of candidates in this city. Macri and Michetti were forced to deny on Thursday a report by a newspaper, saying that one of its photographers overheard the mayor making snide remarks about his former deputy after arguing in public at a campaign appearance together. "Who," Macri purportedly told an aide referring to Michetti, "does she think she is anyway, Mother Teresa?" All was well between Macri and Michetti, who was the sensation of the mayoral campaign of 2007 and turned out to be PRO's winning card back then, the day after. But in such a short campaign De Narváez and Macri are losing precious time in having to deal with talk of rampant bickering.

The elections were originally scheduled for October. But the Kirchners prodded Congress into bringing the date forward, claiming the world financial crisis as the reason. Macri and Michetti run a sensational campaign in 2007. Yet their bid to replicate that campaign and to move into Greater Buenos Aires to back De Narváez has yet to gather such steam. Solá, a Peronist governor who ruled Buenos Aires province between 2002-2007, has said that campaigning in working-class Greater Buenos Aires is a completely different ball game from canvassing in this city.

The prospect of Kirchner, who has turned out to be a gritty campaigner, losing in Buenos Aires province now seems almost entirely out of the question. Yet the race is not over. A Kirchnerite defeat in Buenos Aires province could prompt a major political crisis. But if Kirchner wins, as is now possible, then the President could have enough clout to serve out her mandate until 2011, even when having to deal with the awkwardness - in a country infamous for its flawed politics - of a hung Congress. Two years will be a long time, for both ruling party and opposition, in a nation that will be most likely politically deadlocked.

Kirchner could hit the ground running on election night by simply celebrating in Buenos Aires province. But after that, and when the Lower House seats are counted, there will be a long battle ahead in Congress.
Here's a bittersweet taste of things to come: leaders of the Argentine Industrial Union (UIA) and the AEA association of Argentine business executives attended a meeting of a Lower House committee on Tuesday and said that Venezuela should not be admitted as a full member of the Mercosur trade bloc. No ruling party lawmakers attended the Mercosur committee hearing, which was chaired by the opposition. The business leaders said Venezuela should not be allowed into Mercosur in retaliation for President Hugo Chávez's decision last month to take over two Venezuelan-based iron and steel companies in which Argentine consortium Techint had a stake.

Congress has already approved Venezuela as a member. But a similar congressional approval is pending in Brazil and Paraguay. The business leaders want the Argentine Congress to take back its decision after Chávez's nationalization drive. UIA and AEA have also said in angry statements that Fernández de Kirchner's pledge that it will seek compensation, as it did in the case of another Techint-owned company, is not enough.

Rarely, if ever, has the business community raised its voice in defiance so loudly in the Kirchner years.
Kirchner, in an apparent attempt to discipline the leaders of the business community, blasted Techint at a rally on Thursday organized by the UOM metal workers union. The UOM is in negotiations with Techint, which controls the steelmaker Siderar here, over an annual productivity bonus still owed for 2008.

A confrontational Kirchner, addressing the metal workers, said Techint executives had withdrawn dividends to the tune of six million dollars while still refusing the workers their bonus. Techint fired back in a statement that Siderar had lost 95 million dollars in the first quarter of this year and that it had decided in April "not to distribute dividends."

The government, citing the concession contract, also said on Wednesday it was not allowing private power utility Edesur to transfer 65 million pesos in dividends because it was not satisfied with its investment plan.
A power struggle is developing between Kirchner and the UIA, which since 2003 and during times of growth had been one of the government's staunchest allies. The AEA, judging by its statements, is also striking a defiant chord.

But how correctly is the business community reading the global mood? It was scrambling to deny Chávez a Mercosur passport, in the same week that the Organization of American States (OAS) told communist Cuba it is welcome back if it wants to. Even former US president Bill Clinton, who addressed a conference in Buenos Aires on Tuesday, refrained from dishing out advise to Venezuelan voters when he spoke to a reporter. Clinton, who dined with the Kirchners that night, called for "a new beginning" after the capitalist crunch.

It's also not clear whether, in a cash-strapped world, business leaders can match the Argentine government's firepower, which was enhanced when Congress approved the state takeover of a 100 billion-peso pension fund until then controlled by the private AFJPs. The old AFJP portfolio now controlled by the ANSeS state-run pension administrator includes shares in big private companies. ANSeS has made use of its prerogative to name directors to the board of private companies (including Techint's Siderar.) The SIGEN state comptroller, in a sign that the Fernández de Kirchner administration is moving to aggressively monitor the private sector, said in a statement on Wednesday that it will use its right to name trustees in the firms in which ANSeS holds a stake. SIGEN could thus snoop the books of companies and scoop inside information for the government.

Ultimately, right or wrong, you can sense that the business community has realized that the struggle ahead is political. With state coffers now bursting with money which was once private property, the argument is about who should manage the funds. Not Kirchner, if you ask AEA. But is it the time for a fight? Executives the world over seem in no mood to stand proud in their suits and silk ties. Up in the United States, bankrupt General Motors is now mostly owned by taxpayers.

Fernández de Kirchner, pouncing on a chance to deliver a symbolic jab in the middle of the campaign, announced on Thursday that it is lending 70 million dollars from its ANSeS fund to the local branch of GM, which makes money, so that it can develop a new car in Rosario.
The government on Friday meanwhile offered to make an advance payment of 2.251 billion dollar coupon of the Boden 2012 bond due in August, if holders agree to a haircut. But the big question is if whip-cracking Kirchnernomics will still work after the elections.

It's hard to tell without an election result. The campaign, early on, was pretty normal. But Chávez has now turned into a factor; so have the aggressive heckling of ruling party candidates by farmers who want the soybean export duty lowered. A group of farmers pelted Scioli with eggs when he visited the rural town of Lobería last week. The Liaison board, which groups the nation's four major farm lobbies, on Tuesday condemned the aggression. "What we back," said Eduardo Buzzi of the Argentine Small Farmers Federation (FAA), "are protests, not violence."

Scioli made a point of visiting Lobería again on Wednesday and faced no violence and had to dodge no eggs. Yet one leader of the FAA, Alfredo De Angeli from Entre Ríos, was not feeling apologetic. De Angeli on Wednesday called Kirchner "jerk." De Angeli was reacting to comments by Kirchner about the farmers using "tractors" like the military once used "tanks." Buzzi on Tuesday had accused Kirchner of behaving like "a neighbourhood bully" when "he should be behaving like a statesman."

The campaign has an even shorter feel to it because at times it is almost totally dominated by fierce legal battles over technicalities not only between the ruling party and the opposition, but often between rival factions in the ruling party and in the opposition. The public, according to polls, has little time to bother with the actual campaign. What then does it make of the legal battles? The National Electoral Court, for example, on Monday threw out a complaint by the opposition Social and Civic Accord, which had claimed that Kirchner could not run in Buenos Aires province because he has not lived there for two years in a row as required to be a congressional candidate.

Kirchner lives in the Olivos presidential residence, which is in Buenos Aires province. But the opposition argued that according to the Constitution the residence is "federal territory." The Accord also said that the Constitution bans Scioli and Cabinet Chief Sergio Massa (also a ruling party congressional candidate) because they have no right to be candidates while in office. The court said that Kirchner has lived in the Olivos presidential residence since 2003 - first as president and now as husband to the President. The residence, according to the court, lies in Buenos Aires province and Kirchner can run. The court added that what the Constitution says is that officials like Scioli and Massa can't hold a seat in the Lower House and serve in the executive branch at the same time, which means that they can be candidates.

Scioli and Massa had told the court in a writ that "eventually" they plan to sit in the Lower House. But Scioli has refused to confirm that he will take his seat, prompting speculation that he plans to quit as a lawmaker to stay in office. The court also overruled a decision by a lower court to ban four Unión-PRO candidates to the Lower House in Buenos Aires province because they had not sufficiently proved they had lived there for the last two years.

Kirchner's grip on the Peronist party has lessened considerably ever since Vice-President Julio Cobos, a dissident Radical who sided with the ruling party in 2007, cast the decisive tie-breaking vote against the soybean export duty hike in the Senate last year. But the campaign is showing that the opposition parties also have their vote-losing problems.

Take Cobos for example. The Vice-President is openly backing opposition candidates in his home province, Mendoza, and had an agreement with the Accord in Buenos Aires province. Cobos, who heads a party called ConFe, has declared that his political future now hinges on the performance of the candidates that he is backing in Mendoza, which include the senatorial candidacy of Radical Senator Ernesto Sanz. Yet Cobos' party is locked in an argument with its Accord allies (especially the Radicals) in Buenos Aires province.

The Radicals took Cobos to court after ConFe wanted to field separate candidates in municipal elections across Buenos Aires province. What this basically means is that Cobos' party would be on the side of the Accord in the Lower House elections, but opposing it at a municipal level. A judge on Friday ruled against Cobos' party. The Accord, which also includes the Civic Coalition headed by Elisa Carrió, is technically still sticking together because its list to the Lower House has not disbanded.

Cobos and the Accord (especially Carrió) are pretty much succeeding into not having a full-blown argument. But a brain-numbing court ruling about politics is the kind of news that irks public opinion. The court on Friday, in yet another ruling to settle a dispute, said that Luis Barrionuevo, a Peronist and union leader who fiercely opposes Kirchner in Catamarca province, had the right to use the party symbols. Kirchner immediately ordered the takeover of the Catamarca chapter of the party.

There's more court battles where those came from. The prosecutor has also told the National Court that it should allow Luis Patti, a former police inspector indicted for allegedly committing human rights abuses during the last military dictatorship, to run as a Lower House candidate in Buenos Aires province. Patti, who heads his own centre-right party, could be a factor in the election because he could take votes away from De Narváez. Patti was originally elected to the Lower House in 2005 with about 400,000 votes. But the Lower House said he was "morally unfit" prompting a long legal battle, which was settled in Patti's favour by the Supreme Court.

Yet Congress has refused to allow Patti back, saying the courts have no power over what it decides. Patti on Friday denied speculation that he will not drop out of the race, despite reported efforts by De Narváez's camp. How many rulings can fit into one brain? Can't say. But the Electoral Court on Friday ruled in favour of a claim by the opposition ARI party (it is a member of the Civic Coalition), which had accused the Interior Ministry of wrongly denying it funds to pay for a party convention last year. The government denied any foul play and has appealed. All these cases will go all the way up to the Supreme Court.