The Argentine president, Javier Milei, achieved his first legislative victory this Tuesday after more than four months in office. The Chamber of Deputies approved a new State scrapping bill by 142 votes in favor, 106 against and five abstentions. This is a shortened and much less ambitious version of the one that failed in February due to votes against, even by the allied deputies. The vote is a partial success, because the initiative must overcome one last obstacle to become law: the Senate. Peronism, the first minority in the upper house, anticipates strong opposition there, while social, left-wing organizations and unions will protest in the streets.
The debate in the Chamber of Deputies began on Tuesday at noon and continued in a marathon session of more than 25 uninterrupted hours. First the text was approved in general, but then some of the 232 articles of what was baptized as the draft Law of bases and starting points for the freedom of Argentines were voted on in particular, with closer but also affirmative results in all cases.
The approval of the project shows the change in strategy of the far-right Government compared to February, when the Chamber of Deputies stopped an even more extensive first version of the law. Milei maintains his anti-caste rhetoric today, with constant verbal attacks towards politicians, but agreed to negotiate many articles with provincial governors and leaders of the dialogue opposition to ensure an affirmative vote on the bill.
Milei has needed almost five months to achieve the support of the Chamber of Deputies, but he has achieved it despite being in a clear minority: the ruling party La Libertad Avanza (LLA) has only 38 of the 257 seats in the lower house.
Super President
The deputies agreed to give Milei extraordinary powers for one year to govern by decree in administrative, economic, financial and energy matters. They also authorized him to privatize some state companies—among which are Aerolíneas Argentinas and Ferrocarriles Argentinos—and dissolve almost all public organizations, except for 14. Among those left at the mercy of the closure is the National Genetic Data Bank, in which that the genetic profiles of many relatives of those who disappeared during the dictatorship are preserved—and of the babies who were born in captivity—who are sought by the Grandmothers and Mothers of Plaza de Mayo.
“Less state is more freedom,” said LLA bloc leader Gabriel Bornoroni during the debate. “We are going to build a more agile and efficient State. Bureaucratic obstacles that suffocate the economy will be eliminated,” he added. The Pro, the party led by former president Mauricio Macri, has become the Government’s main legislative ally. Its 37 deputies voted in favor of the project considering that it gives the Government the tools it requests to carry out the change that Argentines voted for in November. Many of the legislators from the Unión Cívica Radical and Hacemos Coalificación Federal also gave their support.
The opposition was led by the Peronist coalition of Unión por la Patria (UxP), which has 99 deputies. Legislator Natalia Zaracho denounced that the new regulations only benefit the most powerful: “It is not for the freedom of Argentines, but rather it is for the freedom of the richest 1% and multinationals. That is why I would call it the Basis Law for the looting of our country and the loss of all our rights.” “We cannot put Argentina’s science, the country’s interests, in a timba to see what comes out,” said the head of the UxP block, Leopoldo Moreau, when criticizing the delegation of legislative powers to Milei.
Benefits to large companies
The Government is betting on Argentina’s economic growth through increased energy, mining and agricultural exports. To attract investments, the project contemplates a generous Large Investment Incentive Regime (RIGI) that offers numerous customs and tax benefits for 30 years to companies with projects of more than 200 million dollars and gives them free rein to import goods. of capital and inputs. “This regime does not give any obligation to companies and will cause harm to the local industry,” criticized Peronist Itai Hagman. In his opinion, companies should be required to contribute to local development and guarantee technology transfer.
Argentina is part of the Lithium Triangle, a key mineral for the manufacture of electric cars that has already begun to be extracted in the salt flats in the northwest of the country and for which more investments are expected. However, the most precious jewel is Vaca Muerta, the gigantic unconventional hydrocarbon formation in Argentine Patagonia that in 2023 broke production records.
This interest helps to understand the 60 articles of the project dedicated to modifying current laws on energy matters. The text eliminates energy self-sufficiency as a priority objective of the Argentine State and enables the free export of hydrocarbons. It also prohibits the regulation of local fuel prices, even in emergency situations.
In case of disagreement between the companies that enter the RIGI and the State, the complaint must be made to the ICSID and not in local courts. For the opposition, the regulations imply the renunciation of the Argentine State to sovereignty over its natural resources. “It is the national surrender to the oil companies,” warned left-wing deputy Christian Castillo.
Labour reform
Milei is on the way to approving a labor reform that Mauricio Macri and Fernando de la Rúa previously attempted without success. It is less than what the Government wanted – 18 of the initial 60 articles remained – but it includes the extension of the trial period to six months and opens the door to a reduction in severance payments in the midst of the economic crisis. Activity fell 3.2% year-on-year in February, weighed down by a drop of almost 20% in construction.
“What is being approved is to facilitate the dismissal of dozens and dozens of workers,” criticized left-wing legislator Myriam Bregman. “They are creating a monstrous business, a source of enormous corruption one day before Workers’ Day,” she added in reference to the possibility that companies create a severance fund to replace compensation.
The Chamber of Deputies also approved a key change to the retirement system: only those who have contributed to social security for at least 30 years will be able to receive a retirement pension. Those who fail to comply with this requirement will not have access to a minimum retirement, as now, but rather to aid that will be regulated by the Government. The measure relieves the burden on the Argentine pension system due to the weakest link in a country in which 44% of the population works in the informal sector.
After the half-sanction, the project will go to the Senate for final approval or rejection. That second vote will take place in a more tense climate than the current one. The unions have called for an air, sea and land transport strike for Monday in rejection of the fiscal chapter of the law that restores the income tax (known as the Profit Tax in Argentina) for those workers with gross salaries of more than of 1.8 million pesos (about 2,000 dollars). Three days later, the largest labor union in the country calls for a general strike, while other unions have also called for sectoral strikes in the coming days.
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