Fiery Argentine leader guided by husband's legacy

BUENOS AIRES Tue Apr 17, 2012 5:46pm EDT

Argentina's President Cristina Fernandez waves to supporters after arriving in a helicopter on her way to the wake of her husband and former President Nestor Kirchner in Buenos Aires, October 29, 2010. REUTERS/Andres Stapff

Argentina's President Cristina Fernandez waves to supporters after arriving in a helicopter on her way to the wake of her husband and former President Nestor Kirchner in Buenos Aires, October 29, 2010.

Credit: Reuters/Andres Stapff

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BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez is a sharp-tongued widow bent on honoring her late husband's political legacy by boosting state control over the economy - even if that means making enemies along the way.

Defying warnings from Spain and the European Union, the center-left leader unveiled a plan on Monday to take control of energy company YPF from Spain's Repsol.

Argentina already has a reputation as a global rule-breaker after staging the biggest sovereign debt default in history in 2002. It has ignored demands for compensation by creditors and private investors ever since.

But Fernandez, 59, has her own reasons for flouting international conventions, dating back to her days as a student activist in the turbulent years leading up to the "Dirty War" 1976-1983 dictatorship.

It was at that time that she met gawky Nestor Kirchner, a charismatic militant and fellow law student who later became her husband and preceded her as president from 2003 to 2007.

"We're going to keep working tirelessly for the Argentina he dreamed of," Fernandez said on Monday as she explained the YPF takeover plan, referring to Kirchner. "I wish he could see me now, because he always dreamed of regaining control of YPF for our country, always."

STAUNCH PERONIST

Fernandez is a glamorous dresser known for her expensive taste, but she has worn only black since Kirchner died of a heart attack 18 months ago. She mentions him in nearly all her public speeches, often tearing up.

The president once compared her marriage to Kirchner to the vaunted pairing of legendary Argentine leader General Juan Peron and his famous second wife, Evita, a cultural icon.

Her nationalistic tone and protectionist policies hearken back to the heyday of Peron's rule in the late 1940s.

But while Fernandez calls herself as a staunch Peronist, she more often pays homage to Kirchner than to Peron, who distanced himself from the left in his later years.

Her son, Maximo, founded a youth movement called La Campora - in honor of left-leaning Peronist President Hector Campora, who governed briefly in 1973 - which has gained significant influence in Fernandez's tight inner circle.

The bid to nationalize YPF is the latest move signaling a sharper shift left since Fernandez won a landslide re-election in October. She has imposed currency and import controls to stem capital flight and bolster the country's trade surplus, while also favoring domestic production over foreign-made goods.

These restrictions may be taking a toll, however. Consumer and business confidence readings are down, and so are her approval ratings.

At the YPF announcement, Fernandez greeted members of the Mothers of the Plaza de Mayo human rights group who were invited to attend - linking the takeover push to the political hopes that inspired her as a student in the 1970s.

"The Mothers view this (expropriation) as a gift after 35 years of struggle," said the group's radical leftist leader, Hebe de Bonafini.

HUGO, NOT DILMA

After marrying, Fernandez and Kirchner moved to his Patagonian homeland as political violence escalated ahead of a 1976 military coup. There they worked as lawyers, building a property rental business and a career in local politics.

Kirchner became governor of oil-rich Santa Cruz province while Fernandez served as a provincial lawmaker and later a national senator. Some commentators later dubbed them Argentina's Bill and Hillary Clinton.

An outspoken member of the upper house, Fernandez was far better known than her husband when he was elected president in the ashes of a crippling 2001-02 economic and political crisis.

The couple worked as a team and some political analysts speculated they planned to take turns in power after Kirchner declined to seek re-election in 2007 and Fernandez ran instead.

If that plan ever existed, Kirchner's death put an end to it. But nostalgia over his legacy - which included a sustained economic rebound and generous welfare spending - helped Fernandez to easy re-election for another four years.

Voters also saw a softer side to Fernandez's combative character as she struggled to adapt to widowhood.

Although Wall Street economists harbored some hope that Fernandez would be more market-friendly than her husband, she shattered their expectations by nationalizing private pension funds and expropriating the country's flagship airline in 2008.

She also failed to clean up the country's discredited inflation data, which drastically lowballs price rises.

Ultimately, Fernandez looks more wedded to ideology than Kirchner, who was seen as an agile, pragmatic politician.

"The world views South America as having two models: Brazil and Venezuela," said political analyst Rosendo Fraga, referring to the moderate left-leaning government in investor favorite Brazil and Venezuelan leader Hugo Chavez's socialist revolution.

"The cost Cristina will pay for nationalizing YPF is that, from a global perspective, she'll be seen as more aligned with Chavez than with (Brazilian President) Dilma Rousseff."

(Additional reporting by Miguel Lo Bianco; Writing by Hilary Burke; Editing by Eric Walsh)

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