Argentina’s debt restructuring plans further stoke fears already heightened by prospect of Peronist return to power.

Argentine asset prices tumbled Thursday as investors scrambled to assess the kind of hit they could take after the government of President Mauricio Macri said it will ask creditors for more time to pay off the country’s roughly $100bn in debts.

The latest round of volatility to hit the recession- and inflation-wracked country began after centre-left presidential candidate Alberto Fernandez trounced pro-market Macri in an August 11 primary election.

Investors fear that should left-leaning Peronists return to power in Argentina, it could herald another full-blown debt crisis in Latin America‘s third-largest economy.

A debt restructuring plan was already expected by the time Treasury Minister Hernan Lacunza said on Wednesday that the government wanted to extend maturities of short-term debt and negotiate new periods for loans to be paid back to the International Monetary Fund.

Lacunza labeled the debt-extension operation a “reprofiling” of obligations that will affect large institutional investors rather than small, individual ones.

Argentine spreads over safe-haven US Treasury bonds – a measure of the perceived risk of default – nonetheless shot up 184 basis points higher to 2,256 on Thursday, according to JPMorgan’s Emerging Markets Bond Index Plus.

Developing markets investment house Tellimer calculates that $7bn of short-term debt, $50bn of long-term debt and $44bn of IMF debt may be earmarked for an overhaul.

Lacunza said he would send a bill to congress to approve changes to bonds governed by local law. Talks with holders were expected to start soon, but would likely be concluded by the government that wins the October general election and takes office in December.

Fernandez, whose running mate is former President Cristina Fernandez de Kirchner, is now the clear frontrunner. Kirchner is loved by millions of low-income Argentines who remember generous welfare spending during her 2007-2015 administration.

The peso slipped 0.31 percent to 58.28 per US dollar, having lost more than 22 percent of its value since Macri’s primary vote debacle all but erased his chances of being re-elected in October.

Over-the-counter government bonds weakened 3.3 percent, and the Merval stock index sank four percent at the open amid uncertainty over the government’s ability to carry out the debt reprofiling so close to the presidential election in October.

The Merval has plunged more than 45 percent since the primary vote.

‘pre-emptive announcement’

The central bank spent $367m of its reserves in foreign exchange market interventions on Wednesday alone as part of its efforts to defend the beleaguered Argentine peso. The central bank sold $83m in reserves in its first intervention of the day on Thursday.

“The pre-emptive announcement from the Macri administration to voluntarily re-profile debt shows cash flow desperation after consistent foreign exchange reserve loss,” said Siobhan Morden, head of Latin America fixed-income strategy at Amherst Pierpont Securities in New York City.

Among key players going forward will be the IMF, which has a $57bn standby loan deal with Argentina. Fernandez has said he wants to renegotiate the IMF pact, which has imposed unpopular austerity measures that damaged Macri’s popularity and set him up for the drubbing he took in the primary vote.

The reprofiling will first apply to short-dated debt denominated in pesos as well as dollars. But it will be issued under local law, Lacunza said, and that would require approval from congress.

Macri-allied lawmaker Eduardo Amadeo told Reuters that congress will decide by how long the government will seek to extend maturities. “It’s something that has not been decided yet,” he said.

The Macri administration would need support from Fernandez and Peronist opposition lawmakers to get the reprofiling through the legislature.

“The opposition can make the debate in congress quite painful for them and highlight that even the need to be debating this measure is a failure of the government’s policies,” said Buenos Aires-based Megan Cook, lead specialist for political and regulatory risk at the Cefeidas Group.

Restructurings are a traumatic subject for Argentine voters who remember the country’s 2001-2002 default -part of an economic meltdown that tossed millions of middle-class Argentines into poverty. Subsequent mini-defaults kept the country locked out of global capital markets for years.

Macri prided himself on moving the country out of default early in his administration and promised to reintegrate Argentina with global markets. But Macri overestimated his ability to attract the foreign direct investment needed to provide Argentina with sustained economic growth.