BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez faces a midterm primary election test on Sunday that will show whether she has enough popular support to push for a constitutional change allowing her to run for a third term in 2015.
Candidates for October legislative elections are being chosen. With no competition among candidates on the lists offered by most parties, and with voters allowed to split the ticket among their choices for the Chamber of Deputies and Senate, Sunday's vote serves as a mega-opinion poll on Fernandez's heavy-handed trade and economic policies.
Argentina's bond investors and those interested in its vast farm and shale oil resources are watching the primary for signs that voters may be tiring of Fernandez's approach and ready for a market-friendly leader in 2015.
Fernandez, 60, says she is not thinking about a possible third term, but talk persists that her congressional allies want the constitution changed to allow her to run again.
For that to happen, Fernandez would have to increase her control of Congress in October, when half the seats in the lower chamber will be up for grabs along with a third of the Senate.
Fernandez's allies would need a two-thirds majority in both chambers to get debate started on a constitutional change to permit a third term.
"She doesn't have that now and she won't have it after October," said Ignacio Labaqui, a Buenos Aires-based analyst for emerging markets consultancy Medley Global Advisors.
"But if the ruling party gets 40 percent or better at the national level, it could still claim to have a strong enough mandate to pressure the opposition into a bargain allowing the third-term amendment."
An over-valued currency, protectionist trade policies, ever-tightening foreign exchange controls and Fernandez's decision to nationalize Argentina's private pension system, its main airline and top oil company YPF have upset investors and trade partners.
Fernandez voted in her home province of Santa Cruz, in the Patagonia region. Unable by law to speak publicly about politics until the polls close, she told reporters that voting was proceeding normally throughout the country, and she took time to gush over her new grandson, who was with her in Santa Cruz.
"He's a real Patagonian. He likes the cold," she told reporters in comments carried nationally by television. "He's beautiful. I know, I'm his grandmother. But seriously, he's beautiful."
The president is sponsoring a list of primary candidates under her FPV (Frente Para la Victoria) coalition, a branch of the country's dominant Peronist party.
The star of the opposition is 41-year-old Sergio Massa, the business-friendly mayor of Tigre, an affluent town known for its picturesque canals in the vote-heavy province of Buenos Aires.
Polls show that Massa's candidates could be Sunday's biggest vote-getters in the must-win province. A strong result could put him in position to run for president in 2015.
"This is a day to continue consolidating democracy," Massa said, referring to this year's 30th anniversary of Argentina's return to civilian rule after decades of military dictatorship. While Massa's nascent political machine has dented Fernandez's support, the opposition remains largely fragmented.
If Fernandez's candidates fail to get 40 percent of the primary vote on the national level, Argentine bond prices will likely rise on Monday. "A vote below 40 percent for the FPV could be market positive, indicating the possibility of political change in 2015," said a research note from Barclays.
On the sidelines is Buenos Aires' popular governor, Daniel Scioli. He is officially allied with Fernandez but could step up to represent the FPV and run for president if her candidates do badly this year.
Scioli is seen as more of a centrist than Fernandez and would be embraced by business leaders.
Meanwhile, Argentina's economy is expected to grow by about 5 percent this year despite looming fiscal troubles.
Argentina has strong inflows from soy, corn and wheat exports. However, public spending has outpaced revenue as the October vote approaches. Going into the primary, central bank reserves are at $37 billion versus $45 billion a year ago.
(Additional reporting by Guido Nejamkis; Editing by Kieran Murray, Xavier Briand and Jackie Frank)
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