Bloomberg News

Argentina President to Take Leave for Thyroid Cancer Surgery

December 29, 2011

(Updates with Fernandez announcement on provinces’ debt in ninth paragraph.)

Dec. 28 (Bloomberg) -- Argentina’s President Cristina Fernandez de Kirchner has been diagnosed with thyroid cancer, though tests show the tumor is contained and has shown no sign of spreading.

Fernandez will undergo surgery Jan. 4 and take a 20-day leave of absence while she recovers, government spokesman Alfredo Scoccimarro told reporters in Buenos Aires last night. Vice President Amado Boudou will run South America’s second- biggest economy during that period. The cancer, first detected during a routine checkup, is isolated to a lobe in the right side of her neck, Scoccimarro said.

While Fernandez’s diagnosis came as a shock to her 43 million compatriots, her health problems are unlikely to affect the government unless they are shown to be worse than is currently believed, said the Eurasia Group, a New York-based political risk group.

Fernandez, 58, publicly mourned the heart attack death of her husband and predecessor, Nestor Kirchner, on her way to re- election Oct. 23. Her own health came into question this year after she canceled trips abroad and daily activities three times following bouts of low blood pressure.

Curable Cancer

Thyroid cancer is highly survivable, with more than 95 percent of patients living at least 10 years after detection, according to the U.S. National Institutes of Health. Treatment typically involves removal of the thyroid, a gland located at the back of the neck that regulates the heart rate and hormones, followed by radioactive iodide treatments, taken orally.

“It’s a simple surgery,” said Guillermo Temperley, director of the Hospital Municipal de Oncologia Marie Curie in Buenos Aires in an interview yesterday with Canal 26 television. “If you remove the gland or the lobe and she’s under control, the president can live many years and die from something else, but not from this.”

Fernandez’s condition isn’t expected to affect financial markets, as the cabinet that took office with her this month remains united and Argentina’s economy will continue growing next year amid a global slump, said Leonardo Bazzi, head of research at Buenos Aires brokerage Puente Hermanos SA.

“Bonds and stocks shouldn’t react much to these news,” said Bazzi.

Today, Fernandez made her first appearance since yesterday’s announcement to disclose a plan to refinance provinces’ debt. She spoke at the presidential palace in Buenos Aires. During the afternoon, she will hold meetings with her ministers at her residence in Buenos Aires, Scoccimarro said.

Landslide Re-Election

Since Fernandez’s re-election, the yield on Argentina’s government dollar bonds due in 2017 fell 50 basis points to 10.5 percent yesterday. The bonds were little changed today. This year, the peso has weakened 7.4 percent to 4.2964 per dollar.

Fernandez was re-elected by a landslide after overseeing an economic expansion that averaged an annual 5.6 percent during her first four-year term. In that time she used record revenue from booming soybean exports to boost spending on public works, pensions and cash handouts to poor families. The expenditures contributed to a consumer boom and helped fuel inflation that economists estimate at an annual 25 percent.

Economic Challenges

The economic challenges for her second term are more pronounced. Growth in 2012 is expected to slow to 2.8 percent, from 7 percent in 2011, according to a Bloomberg survey of economists.

Policies introduced by Fernandez since her re-election have further alienated foreign investors who’ve largely shunned the country since its 2001 default on $95 billion in bonds.

Fernandez has placed limits on how much foreign currency Argentines can buy in a bid to stem capital flight that doubled to a record $18 billion in the first nine months of the year. She’s also required exporters to repatriate revenue.

As a result of her measures, the central bank has become a net buyer of dollars in the foreign-exchange market, purchasing a record $413 million on Dec. 22, according to a bank official who declined to be identified because he isn’t authorized to speak publicly.

Boudou, 49, was Fernandez’s economy minister during her first term. While he’s never held elected office before, he’s a fervent ally of Fernandez. As head of the nation’s social security agency in 2008, he led the government’s seizure of about $24 billion in private pension funds.

“It is unlikely that Boudou will have much freedom or autonomy” during Fernandez’s absence, Daniel Kerner, a Buenos Aires-based analyst for the Eurasia Group, wrote in a report.

Boudou will ensure that her policies continue during her absence, Fernandez said today.

“Look how important it is for the vice president to think the same way as the person who was elected to lead the destiny of the country,” Fernandez said.

Fernandez is the latest South American leader to be diagnosed with cancer. Venezuelan President Hugo Chavez, Fernando Lugo of Paraguay and Dilma Rousseff of Brazil have all been diagnosed, and last month former Brazilian President Luiz Inacio Lula da Silva underwent treatment for throat cancer.

--With assistance from Randall Woods in Santiago. Editors: Richard Jarvie, Joshua Goodman

To contact the reporters on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net; Camila Russo in Buenos Aires at crusso15@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.


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