UPDATE 3-Argentina's Macri chooses moderate running mate in move to broaden base

By Gram Slattery and Walter Bianchi
Updated

(Updates market reaction, adds context)

By Gram Slattery and Walter Bianchi

BUENOS AIRES, June 11 (Reuters) - Moderate Argentine Senator Miguel Pichetto will run as vice-presidential candidate with President Mauricio Macri in October's election, the two politicians said on Tuesday, a selection that could help broaden the struggling leader's voter base.

In a series of tweets, Macri, a center-right former businessman whose popularity has been hit by a flagging economy and high inflation, called the October election an opportunity to "consolidate democracy" and laid out a series of goals such as defending human rights and combating crime.

"For all of this, we'll need to build agreements with a lot of generosity and patriotism, which all Argentines who share these values can support," Macri wrote.

Pichetto, who currently serves as president of Argentina's Senate, is an adherent of Peronism, an ideologically diverse political movement in Argentina. Considered a moderate, he supported the administration of leftist former president and current vice-presidential candidate Cristina Fernandez de Kirchner during her 2007-2015 administration.

He then moved to the center and was a key player in allowing Macri, who took power in 2015, to seal a final deal with holders of Argentine sovereign bonds, which was key to loosening up access to international financial markets.

Investors appeared to approve of Macri's choice. A closely watched JP Morgan country risk index fell 66 basis points on the news to 866 points overall, its lowest level since April. The country's benchmark Merval equities index jumped on the news, to close up 4.01% on Tuesday.

"(Pichetto) can offer governability to (Macri) and can allow him to manage the Senate, which is the most difficult part," said Leonardo Svirsky of Buenos Aires-based Bull Market Brokers.

Macri, a scion of one of Argentina's wealthiest families, came to power in 2015 on promises to kick-start Latin America's third-largest economy via a liberalization wave after 12 years of interventionist rule. But the promised recovery has still not materialized, with the economy having shrunk by 2.5 percent in 2018 and 12-month rolling inflation over 50 percent.

Polls show him narrowly trailing the main opposition ticket, on which Fernandez is running for vice president under Alberto Fernandez, a former cabinet chief. (Reporting by Gram Slattery and Walter Bianchi; Editing by Lisa Shumaker, Phil Berlowitz and Dan Grebler)