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 the changes introduced by the Senate to the so-called ‘Ley Bases’ since noon (15:00 GMT) and finally decided, by 148 votes to 107, to approve the law including these 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 achieves the delegation of 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 so that it can reform the State once and for all,” said the head of the ruling bloc Gabriel Bornoroni in his closing speech.
The reform package achieved its final sanction after a tortuous process that returned it to the Lower House as the review body for the modifications.
“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 deregulation, privatization and unconditional opening of the economy that will cause a severe blow to industry and small and medium-sized national businesses, 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 keep the oil and lithium in exchange.” you’re welcome” and that will turn the country into “a tax hideout.
Political scientist Tigani warned that “laws do not mean much when the economic and social situation is explosive.”
“I see problems of governability and a president under pressure from the social situation despite having his laws,” he explained.
The Law of 600 articles 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 in poverty.
But it also represents new political challenges, according to analyst Carlos Germano, from the consulting firm Germano y Asociados.
“Getting the first law is of utmost political importance, but the Government now has a new challenge because the dialogue opposition is going to begin to generate another policy totally different from the one of these 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 official initiative, stated in the debate: “We are going to give the government the tools because we believe that it has to solve what they could not until today. Now the excuses are over.”
Originally, the ‘Ley Bases’, 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 achieve approval, the Government removed the flag airline Aerolíneas Argentinas, Correo Argentino and Radio y Televisión Argentina (RTA) from the list of companies to be privatized, 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 surroundings of Congress were 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 premises.
The Executive must promulgate the law for it to come into force, but can also veto it in whole or in part.
mg (afp, clarion)
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