The Congress of Argentina granted the first legislative victory to President Javier Milei in the early hours of this Friday (06/28/2024) by approving his package of economic reforms, although limited with respect to the original version after months of debates.
“The Office of the President of the Argentine Republic celebrates the approval of the Law of Bases and Starting Points for the Freedom of Argentines,” published the official account of the presidency on X.
The Chamber of Deputies debated from noon (3:00 p.m. GMT) the modifications introduced by the Senate to the so-called ‘Bases Law’ and finally resolved, by 148 votes to 107, to sanction the norm including those changes.
However, he maintained the original version of the tax reform package, which includes the reinstatement of the income tax on salaries.
With this sanction, the president has been granted legislative powers for one year, incentives for large investments for 30 years, a relaxation of labor legislation and authorization to privatize a dozen public companies, among other points.
“We are going to give President Milei’s government the tools to reform the state once and for all,” said the head of the ruling party bloc, Gabriel Bornoroni, in his closing speech.
The reform package was finally approved after a tortuous process that sent it back to the Lower House as the body that would review the changes.
“The national government has succeeded in approving the first law towards the free and prosperous country that the Argentines have chosen,” the presidential statement said.
Politically, the approval means “a total success for the Government,” political scientist and economist Pablo Tigani told AFP.
But economically “it will be a return to the politics of the 1990s with deregulations, privatizations and unconditional opening of the economy that will cause a hard blow to industry and small and medium-sized national companies, with a phenomenal transfer of income to the most concentrated sectors of the economy,” he assessed.
“This is a tailor-made suit made for the sectors of power concentrated in Argentina,” said Peronist deputy Hugo Yasky in his speech, who considered that the law allows foreign capital to “come and take over oil and lithium in exchange for nothing” and that it will turn the country into “a tax haven.”
Political scientist Tigani warned that “laws do not mean much when the economic and social situation is explosive.”
“I see governability problems and a president in check over the social situation despite having his laws,” he explained.
The 600-article law was reduced to 238
Argentina, with its economy in recession and inflation at 280% annually as of May, suffered a 5.1% collapse in gross domestic product in the first quarter of this year and has more than half of its population living in poverty.
But it also represents new challenges politically, according to analyst Carlos Germano, from the consulting firm Germano y Asociados.
“Getting the first law is of the utmost political importance, but the government now has a new challenge because the opposition is going to start generating a policy that is totally different from the one it has been doing in the last six months,” he said.
This will force Milei “to prioritize management, to be much more of a president and to stop promoting the character that allowed him to get to this point,” he said.
Deputy Oscar Agost Carreño, part of an opposition bloc that supported the government’s initiative, said in the debate: “We are going to give the government the tools because we believe that it has to resolve what it has not been able to do until now. Now the excuses are over.”
Originally, the ‘Bases Law’, which Milei launched with pomp as the foundation of his Government plan, contained more than 600 articles, but after a failure in its treatment in February, it was reduced to 238 articles that were also modified in the Senate.
To obtain approval, the government removed from the list of companies to be privatized the flag carrier Aerolíneas Argentinas, the Argentine Post Office and Radio y Televisión Argentina (RTA), which controls Public TV and National Radio.
The government also sacrificed a reform to the pension system that involved eliminating a moratorium that benefits those who, upon reaching retirement age, cannot prove 30 years of contributions, in a country where almost half of workers are in the informal sector.
The area surrounding Congress was fenced off to prevent protests and incidents, such as those that occurred during the debate in the Senate two weeks ago, although this time there were no large demonstrations in front of the building.
The Executive must enact the law for it to enter into force, but it can also veto it in whole or in part.
mg (afp, clarion)
