Argentina: Milei is a little closer to his mega law

Dhe Argentine House of Representatives approved President Javier Milei's mega legislative package with 144 votes to 109. Friday's vote was preceded by an at times extremely heated marathon debate that lasted three days. During the debate, the law continued to be tinkered with, sometimes in back rooms. In the end, almost half of the original 664 articles had disappeared from the law.

Despite the shrinkage, the law in its current form creates the basis for deregulating the Argentine economy in many areas and privatizing over a dozen state-owned companies. Of the 41 originally planned privatizations and partial privatizations, only 27 remained. This includes, for example, the national airline Aerolíneas Argentinas, which is to be partially privatized. However, the state oil company YPF and a number of other companies will initially remain in state hands.

The government had already been prepared to make concessions. Milei's libertarian alliance “Freedom Advances” has only a small minority in Congress with 38 of 257 seats and is dependent on broad support from the bourgeois bloc and the center. At the end of January, Finance Minister Luis Caputo announced the deletion of the entire fiscal policy chapter, which was considered the core of the law. It will now be taken up again at a later date.

Legislative powers for Milei

The law also provides for the declaration of a state of emergency in various areas, giving Milei legislative powers. However, the competencies have been restricted compared to the original version. They are limited to the areas of economics, finance, security, tariffs, energy and administration. They were also limited to one year instead of the proposed two. Nevertheless, the opposition fears that the government could abuse the powers, for example to reintroduce deleted articles of the law through the back door.

While the representatives haggled and argued inside the congress, there were demonstrations outside on the streets on all three days by left-wing movements and parties that have been mobilizing against the new government's law for weeks. The government countered the demonstrators with a massive police presence to keep the streets clear. There were particularly violent clashes on Thursday.

The police used water cannons, rubber bullets and pepper spray. Over 100 people were injured, including several journalists. Human rights groups and two press unions have filed a complaint against the Argentine government with the Inter-American Commission on Human Rights over the police's excessive crackdown. Resistance to the law is unlikely to stop after the first vote, neither on the streets nor in Congress.

Milei has overcome the first hurdle with his law. But the vote also showed that he and his party have little influence in Congress. By anticipating this and submitting a maximum proposal, the government was left with enough negotiating leverage to push through at least part of the legislative package. Observers are still divided as to whether Milei can be said to have won, especially since the vote has not yet been completed.

From Tuesday, MPs will vote on the individual articles of the comprehensive law, which could spark new discussions and result in further adjustments. Subject to its approval, it will then be forwarded to the Senate, where the majority is even narrower.