By Hugh Bronstein and Nicolás Misculin

BUENOS AIRES, (Reuters) Argentine voters stung Peronist parties in midterm elections Sunday. Initial results show that President Albert Fernandez’s centre-left party is on course to lose the majority of the Senate, which it has held for nearly 40 years.

The Juntos conservative opposition won more than 80% of the national vote. This includes a crucial lower-house race in Buenos Aires which is a stronghold of the Peronists.

Juntos held strong lead in key Senate elections with majority votes counted. This would erase the majority rule party and hinder Fernandez from pushing through legislation without support.

This vote will see half of the lower Chamber of Deputies and one third of the Senate seats up for grabs. The voters are focused on rampant inflation running over 50%, high poverty levels made worse by the COVID-19 epidemic.

Ricardo Arese, a 69-year-old security guard in Buenos Aires said, “I don’t know many people who can make enough money to reach the end of the month.” According to him, his household costs have increased 300% over 2016 and he has little cause for optimism.

We see a difficult two-year ahead.

While voting was smooth under bright skies during the Southern Hemisphere Spring, some voters were unhappy or downcast.

“I came to vote for the change I want. Mirta Laria (52) a Buenos Aires-based housewife said, “We are tired.” Every day is worse and our children see no way to escape for their lives abroad.

President Fernandez is facing a trial by fire https://www.reuters.com/world/americas/argentinas-fernandez-faces-political-acid-test-midterm-vote-2021-11-12 in the vote, after his popularity was hit due to COVID-19 lockdowns, spiraling inflation and a currency that is hitting record lows against the U.S. dollar despite strict capital controls.

Ignacio Labaqui from Medley Global Advisors in New York, Argentina, stated that Fernandez’s loss would result in him having “very little power” as part of an unstable coalition. Also, he would have to deal with many economic problems, beginning with inflation.

‘PERONIST FAMILY’

While the governing coalition controls 41 of 72 Senate seats, it is also the largest bloc within the lower house. The governing coalition could lose its Senate majority, and it may be relegated to the lower chamber.

Focus has been on lower-house results in densely populated Buenos Aires province, while key Senate races https://www.reuters.com/world/americas/argentinas-hinterland-where-cows-outnumber-people-could-tip-balance-congress-2021-11-11 are in provinces such as La Pampa, Chubut and Santa Fe. All those races are in the opposition’s favor.

The Chamber of Deputies has 127 seats out of total 257 and there are 24 Senate seats across eight provinces.

Fernandez’s defeat could weaken as the pressure mounts to reach a new agreement with the International Monetary Fund, to pay $45 billion more in debt payments that the grain-producing country can not make. The primary defeat could cause a cabinet shake-up and divide the government among moderates or radicals.

Fernandez cast his vote and promised to fight for his cause regardless of how the results came out, despite the fact that experts said he might be up against the radical wings of his party, who are allied with Vice President Cristina Fernandez de Kirchner.

“Tonight will be the night when we hear from the people. “Tomorrow… Argentina continues with all the strength and will keep governing and doing whatever we can so that the country’s well,” he stated.

Many Peronist-government social spending has been a major source of income for many families since 2001/02’s economic collapse, which threw millions into poverty.

One voter indicated that she is sticking with the ruling Party because she feels part the “Peronist Family”.

A 47-year old housewife and mother of four, Graciela, also voted, saying that state support is essential to survive in difficult economic times.

She said, “If it wasn’t for the subsidy that I have,” and she added that it was difficult to find work if it were not for it.