“Beautiful morning, as they say,” was the phrase chosen by the Argentine presidential spokesperson, Manuel Adorni, referring to the famous video of Guillermo Francella that went viral, to celebrate this Thursday the general approval of the draft Bases and Law. the Fiscal Package, which finished voting at six in the morning in the Senate. Thus, shortly after completing his first six months in power, President Javier Milei scored his first legislative victory.
Adorni highlighted the positive reaction of the markets. “The day after the Senate sanctioned the reforms included in the official initiative, Wall Street stocks rose 8%, bonds recovered 4% of their value and Country Risk opened lower,” he explained. .
“For Milei, the country remains governable,” wrote La Nación columnist Carlos Pagni, who highlighted that “the sanction of the Bases Law that he achieved in the Senate is a triumph that is magnified by the difficulties he faced.” “The approval of the official project, which required the tie-breaking of Vice President Victoria Villarruel, and which subsequently advanced without too many inconveniences in the particular treatment, was a triumph that the Casa Rosada has every right to celebrate,” he insisted.
“The preliminary approval of the laws that the Lower House had passed is a considerable success for Milei. Looked at in more detail, it seems quite a feat. The President has no more than 38 deputies and seven senators. And he wanted to have two texts approved that are equivalent, for conventional parliamentary life, to a dozen laws. With highly sensitive matters: from privatizations to tax changes, including advantages for large investors and obtaining a delegation of powers,” argued Pagni.
And he continued: “The ruling party managed to impose on a large part of society the idea that the political class, the damned ‘caste’, complicated Milei’s life by holding back two laws for about half a year. But, if the audacity of the articles is compared with its own legislative indigence, the government achieved a miracle. Especially if you remember that the negotiation took place in the midst of a severe fiscal adjustment that affects all provinces.”
Along the same lines, the former Attorney General of the Treasury of the Nation, lawyer Bernardo Saravia Frías, wrote in the newspaper Clarín: “Even with all the tensions and defects, the draft Base Law is a great institutional step: powers of the State that work, a republic that works. “All the more reasons to celebrate, in an anomic Argentina.”
The legislative package must now return to the Chamber of Deputies – which approved it on April 30 – for approval, since the senators introduced some changes, and there it will be discussed whether it is approved with the changes made in the Senate or left with the original version approved a few months ago.
In that sense, Adorni confirmed that the ruling party will insist in the Chamber of Deputies with the chapters that were left out of the original text of the project. “We will continue to insist, it is a law that we have worked on a lot. The Base Law, even the original one, was made with a lot of work, emphasis has been placed on it, years of work, and it will be insisted on because we believe and are convinced,” he noted.
More light was shed by the Chief of Staff, Guillermo Francos, who anticipated that Milei’s government will advance in any way with the sale of state companies that were excluded from the list of privatizations negotiated with opposition senators, to obtain approval of the Law. Bases. “We are going to insist on the privatizations of Aerolíneas Argentinas, Correo Argentino and etc.,” Francos pointed out, hours after having agreed otherwise in Congress, highlighted the newspaper Página/12.
According to the BBC, one of the most important keys of the Bases Law for the government is that it grants the president extraordinary powers for one year, by declaring “a public emergency in administrative, economic, financial and energy matters.” This will allow Milei to have, until mid-2025, powers that normally correspond to the Legislative Branch. Thus, it will be able to decide on these issues without going through Congress.
During the period of delegated powers, the president may legislate through decrees, which must then be controlled by the same Bicameral Legislative Commission that controls decrees of necessity and urgency.
Another of the most controversial proposals of the Base Law is the so-called Large Investment Incentive Regime (RIGI). This provides for tax, customs and exchange benefits for 30 years, in addition to regulatory stability and protection against State abuses, for projects exceeding US$200 million, in order to encourage large investments, both national and foreign, in the long term. . It is aimed at sectors considered strategic for the development of the country, such as energy, agriculture, mining (including lithium extraction) and infrastructure.
But critics claim that it will give a significant advantage to large companies, particularly multinationals, and that it will harm Argentine small and medium-sized companies (SMEs), which today generate 70% of employment, according to the British media.
Likewise, the Base Law will allow the government to put some State companies up for sale. However, they will not be all public sector companies, as proposed in the original project presented by Milei.
Aerolíneas Argentinas, Correo Argentino, Radio y Televisión Argentina Sociedad del Estado (RTA) were the state companies that La Libertad Avanza resigned from the list of companies to sell. In this way, those that will be privatized or concessioned by the Base Law will be AYSA, Intercargo, Corredores Viales, Belgrano Cargas, SOFSE and Energía Argentina, detailed Página/12.
Meanwhile, according to the BBC, the Base Law contains several articles that seek to modernize the labor regime and encourage the growth of formal private employment, which has been stagnant for more than a decade. The standard offers benefits for employers who regularize their workers. But, at the same time, it eliminates sanctions against “informal” work.
According to the Milei Executive, this flexibility will lead more companies to hire personnel, since, currently, many entrepreneurs are afraid of taking on new employees due to the possibility of facing a labor lawsuit that can lead an SME to bankruptcy. However, the Research and Training Center of the Argentine Workers’ Union warned that “by reducing the cost of breaking the law, effective compliance is discouraged, so this modification will tend to increase unregistered employment.”
