Javier Milei has formally begun the dismantling of the Argentine State. Surrounded by his ministers, the far-right President presented this Wednesday a decree that repeals laws, eliminates dozens of state regulations, enables the privatization of public companies such as the oil company YPF and opens the door to operations in dollars. He also gives the kickoff to make the labor market and the health system more flexible. The new regulations will be in force at least until the decree is reviewed by Congress, where the ruling party is in the minority. To reject it, a negative vote from both Houses is necessary.
In a 15-minute read speech, Milei listed 30 of the nearly 300 reforms contained in the text that will be published in the official gazette. Among them is the repeal of the laws that forced companies to guarantee the internal supply of food and supermarkets to indicate the lowest prices of some basic products. It also eliminates industrial promotion regulations in disadvantaged areas, the rent law that established semiannual increases for tenants and legislation that prevents the privatization of public companies.
From today, soccer clubs will be able to be public limited companies, foreigners will have no limits on purchasing land and operations can be carried out in dollars without any impediment.
The health system will also undergo important changes. Private insurance will be able to freely set prices from now on, while insurance linked to unions (known as social insurance) will have a more flexible regulatory framework. In addition, electronic medical prescription is established with the aim of streamlining procedures and reducing costs.
The decree opens the protected Argentine market to the world by eliminating many of the rules that hindered imports and exports. The Argentine industry, which has enjoyed little internal competition for years, will be one of the most affected sectors, as already happened during the neoliberal decade of Carlos Menem (1989-1999).
Milei began his speech, broadcast on national radio and television in prime time, with a long diatribe against politicians—whom he called a deified “caste”—and the left, which he again accused of causing millions of deaths around the world. The far-right will also send to Congress a series of laws with changes that cannot be made by presidential decree. “The deputies will have to choose between being part of the change or obstructing the most ambitious reform process in the last 40 years so that Argentina becomes a world power again,” he threatened. He will not wait until March, when the legislative year begins, but he will call extraordinary sessions.
One of Milei's workhorses is the deregulation of the Argentine labor market, which maintains very beneficial rules for white-collar workers, 30% of the total. Several governments have tried to reform labor legislation and have failed, but the new president wants to try it again. The decree attacks those aspects of the regulations that do not need to go through Congress, such as the increase in the trial period before new hires and alternative compensation mechanisms to the current ones.
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Milei became president with the record vote of 56% of Argentines and uses that support to ask legislators to approve the change of course “that the people voted for.” She, but she, governs in a very polarized society and with powerful unions and organizations that are willing to stand up in the streets to any curtailment of rights. The first demonstration took place on Wednesday afternoon, when more than ten thousand people took over the center of Buenos Aires amid a huge police deployment to protest against the large announced cut in public spending, of about 20 billion dollars.
Hours later, after hearing the reading of the presidential decree, the protest was revived among the urban middle class. Outraged neighbors expressed their rejection by banging pots and pans from the balconies of Buenos Aires and other large cities in the country. Little by little, protesters gathered on the main avenues of each neighborhood and hundreds of them decided to march together to the doors of Congress, where many drivers honked their horns in a sign of support. These types of demonstrations became popular in 2001, when the worst economic and social crisis in Argentina's recent history broke out.
The opposition harshly condemned a decree that seeks to transform Argentina into a liberal state overnight. From Peronism, one of the most critical voices was that of the Buenos Aires governor Axel Kicillof: “[Milei] It proposes to privatize everything, deregulate everything, destroy workers' rights, destroy entire sectors of production, raffle off soccer clubs and the assets of Argentines. All this, without going through Congress, which could meet and discuss it. He failed to say “democracy: get out!” He pointed out. The left called on the unions to call a general strike.
Congress can reject Milei's decree of necessity and urgency with a majority vote in each of the chambers. If only one of them approves it, the decree is valid, as well as if it is not processed by any of them. While this occurs, the new regulations are in force.
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