Argentine President Cristina Fernandez ruled out a Cabinet reshuffle and defended her handling of the economy on Monday after losing control of Congress in a mid-term election. The vote was seen as a rejection of Fernandez's combative style and economic policies and she conceded she would have to seek new alliances in Congress.
But she rejected a broad change in direction. "It's important to understand that negotiation isn't about giving up your principles," Fernandez told a news conference at the presidential palace. "I don't see any reason to make a change to the Cabinet due to the election result."
Sunday's defeat was particularly bitter for Fernandez and her husband, former President Nestor Kirchner, who preceded her in office, because he lost a high-profile congressional race. He was defeated by a millionaire businessman from a rival faction within the ruling Peronist party. On Monday, Kirchner resigned as the head of the party and was replaced by Buenos Aires Governor Daniel Scioli.
The government's electoral losses may lead to political gridlock and a power struggle in the Peronist party as rivals jostle for positions ahead of a 2011 presidential election. A government source, who asked not to be named, said earlier Fernandez could replace several ministers in the wake of the humiliating defeat. The Kirchners have nationalised some companies and defended their use of price controls, energy subsidies, limits on exports, taxes on grain exports and other interventions in the economy as a way to protect consumers and redistribute wealth.
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