Politicians did not sleep last night and are preparing for the most important legislative battle in recent years. The red circle awaits today definitions on what the true balance of power is like in today’s Argentina. The markets adjust their screen movements for what will be frenetic decisions to buy or sell, depending on the result of the votes in the Senate tonight. Or maybe tomorrow. Citizens, meanwhile, are waiting to know if Javier Milei will have his first serious important victory since he took office on December 10, or if the country will enter a political crisis that only time will be able to measure.
Meanwhile, and as the social science maxim says, economics follows politics, and not the other way around. And when politics is not ordered and does not provide certainty, the economy will not be able to fulfill that role.
An entire country will thus be waiting for what happens from the moment the treatment of the Bases II package, the Fiscal Adjustment and, perhaps, retirement mobility begins to be defined; on the day where battle will perhaps be fought for the first time in the open sky; as are the two country models that Argentina is currently debating. And they have the Argentine economy in direct suspense. Without making investment decisions, neither financial nor real, until there is a definition. For one side. Or for the other.
Something is already known and said.
The Government will take the replacement of Profits for the fourth category as a pledge of exchange. In order of Javier Milei, only if the senators approve in general and in particular (even with changes) bases II and the Fiscal Package, will progress be made with the improvement of the percentage of the tax that was removed last September by Sergio Massa during the electoral campaign, with the support of the provinces and knowing that they generated significant damage to revenue collection via co-participation. But everyone said that at some point there would be some vindication for what was lost, and a recovery of the collection. Massa lost, Milei won, and any deal the governors made to cover lost revenue was unknown. According to the calculations of most analysts, the drop in collection in the first four months of the year (between January and April) was 15% on average, with dependent co-participation provinces whose income losses reached more than 20%. Now the recovery of that money is within reach of the governors, but with one condition: that Bases II and the rest of the fiscal package be approved. This is how Milei arranged it. And this is how the ruling party’s negotiators and libertarian legislators will respect it when discussing with their dialogue-oriented colleagues and those who are not so dialogue-oriented.
It will be a battle that will be remembered for years. And that will mark the political and economic history of the Government of Javier Milei. In part, and without exaggeration, it will remain in the books in which the libertarian’s management will be told. And like those fights that interest not only the protagonists and their followers, but also independents fascinated with the reality of the country, everyone will be attentive from the preliminary moments of the great crossing that is coming.
The political importance of today’s debate is that for the first time directly, the right-wing liberal front led by Javier Milei, along with the residual center-right of the PRO, along with part of the radicalism and various provincials. On the other, Kirchnerism, which considers the possibility of stopping the progress of the project that has half a sanction in Deputies as what may be one of its last opportunities for political redemption, with the alternative of becoming, once again, the inevitable opposition reference. and the custodian of the keys to the Peronist kingdom going forward. But Kirchnerism also knows that, if it loses the battle, it could represent some type of Waterloo within the main opposition front, a defeat from which it would be very difficult to get up. Not to be confused.
The possibility of Kirchnerism to accompany Martín Lousteau’s ruling is just a strategic political movement to bombard the initiative of Milei. Supporting a radical initiative is just a matter of times and moments. It is done because it serves the most ambitious goals of sending a missile directly to the waterline of the government’s chances of success. Milei. That Bases II is a reality, for Kirchnerism, is an affront to the cultural and ideological heritage of everything that the political front founded by Néstor Kirchner and continued by Cristina Fernández de Kirchner represents.
For ratification, just one example: just imagining that one of the pearls of Kirchnerism, the re-nationalization of Aguas Argentina refounded in the current AySA, could once again be private, is an event impossible to bear. And of this type, there are at least 200 mentions within Bases II. The pension moratorium for housewives who did not complete or directly make contributions in their working life was launched by Cristina Fernández de Kirchner herself in one of those mega events at the Bicentennial Museum, in September 2015. It was presented as a triumph of equity in a day where some 450 thousand retirement certificates were delivered.
The labor reform included in Bases II points against two ideas that Kirchnerism always rejected as the alternative to creating more employment: the reduction in the labor cost of compensation and the opening to longer trial period periods. The project that the Senate will debate also adds the direct possibility that Milei eliminate public organizations on a discretionary basis and for one year. He knows Kirchnerism can disappear, by dint of a presidential resolution, pearls of his management such as Inadi and other departments that were created or transformed in the image and likeness of their own ideology.
For Milei and his approval of Bases II is the dreamed opportunity to begin to advance in part of the country that the president has in mind, and that Federico Sturzenegger explained very well in a thread on account X last Sunday. He feels that, although devalued compared to the original project that was withdrawn from Deputies in the summer, much of the content of Bases II includes the essential tools to implement in the next two years the necessary reforms to get the country out of the terminal crisis that the libertarian consider what Argentina fell into in the last 80 years; process that he came to complete. Privatizations, state reform, the application of a very generous investment promotion program, labor reform, money laundering, tax and pension moratoriums, tax changes, retirement modifications and the rest of the content of the two projects in question, they mean in the mind of the President the first step to begin his planned national refoundation. At least for the next two years. After the legislative elections, the rest of the reforms that were left out in Bases I would be sent to Congress. But the first step will begin to take shape today. Or not.
