The president of Argentina, Javier Milei, faces the challenge of a key parliamentary debate this Wednesday for the future of his plan for profound economic reforms in the South American country.
The Chamber of Deputies called a session at 10:00 am, local time (8 am Colombia time) in order to debate in plenary session the draft of the Law of Bases and Starting Points for the Freedom of Argentines, sent by the Executive at the end of December to be discussed in extraordinary sessions.
The so-called 'omnibus law' due to the length of the text and the breadth of the reforms it includes reaches the plenary session of the Lower House after a month of bitter discussions in parliamentary committees and intense negotiations between the Government and the different political blocs and provincial governors to move the initiative forward.
As part of a session that is expected to be more than hectic, Social organizations will demonstrate at the doors of the National Congress this Wednesday and unions who reject the extensive reform promoted by Milei to deregulate the economy.
How was the initiative and what options does it have to prosper in Congress? A B C.
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What is the 'omnibus law'?
The bill Bases and Starting Points for the Freedom of Argentines was sent by Milei to Congress on December 27 with 664 articles and provides for the transfer of legislative powers to the Executive in the context of a multiple emergency. It is also part of Milei's objective of deregulating the economy and reducing the weight of the State.
The 'Omnibus Law', as the project is known, is complemented by a mega decree of 366 articles issued by Milei with more deregulations, which was partially suspended by several courts and which must also be considered by a bicameral commission of Congress.
The 'omnibus law' includes a reform of the electoral system and the tax regime, in addition to allowing the privatization of public companies.
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The decree also limits the right to strike, modifies labor agreements and the dismissal compensation system, and repeals laws to protect consumers against abusive price increases when annual inflation exceeds 160% and 40% of the population lives in poverty.
The initiative repeals the law on retirement mobility and the law that regulates rents, frees the price of bank commissions and punitive rates for debts and allows sports clubs to become public limited companies, among other regulations.
Has the text had changes?
Yeah. The minority position of Milei's party in Congress led the ruling party to exchange meetings with different actors to reach a reduced version. Thus, the project, which initially had 664 articles, reaches the plenary session with 300 fewer articles.
The Government, for example, withdrew the fiscal chapter from the project last Friday to facilitate parliamentary treatment. after the strong rejection of some proposals by the governors.
The fiscal package consisted of five measures: money laundering, a tax moratorium, an advance on personal property tax, an increase in export duties and a change in the formula for updating pensions.
The minority position of Milei's party in Congress led the ruling party to exchange meetings
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The Government needed this increase in income to achieve fiscal balance from a red of 6.1% of GDP in 2023, which it considers the reason for the high inflation suffered by the country, 211.4% annually in 2023, and the lack financing and investment.
The Executive renounced the increase in income with that decision, but stated that the fiscal balance is “absolutely inalienable”, which is why it anticipated that there will be a cut, which will surely affect transfers from the Nation to the provinces.
The government also modified the multiple emergency under which the reforms proposed by the Executive are protected. The text, known by Efeindicates that the emergency would only be declared until December 31, 2024, although it could be extended for another year (until the end of 2025), which would mean a maximum of two years compared to the four that were initially contemplated.
In the section related to the privatization of public companies, The Executive eliminated the majority state oil company YPF, controlled 51% by the Argentine State after the expropriation of the Spanish company Repsol in 2012 and is listed on Wall Street.
The new project would also change the retirement formulas in the South American country. Argentines over 65 years of age or those who can prove 30 years of service would receive a “monthly, mobile, lifetime and non-attachable allowance.”
The reform of the 'omnibus law' also eliminates the so-called lifetime 'privilege pensions' for former presidents and former vice presidents of Argentina.
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Another of the most controversial chapters of the original block was the one related to security, where it was proposed that any meeting of more than three people called on an “intentional and temporary” basis be considered a “demonstration.”
Now, the minimum would be raised to congregations of more than thirty people, to which the provisions of the strict security protocol introduced by the Government in December would apply.
In the cultural section, whose affected parties have radically opposed the 'omnibus law', the Government would not back down in the closure of public institutions such as the National Theater Institute or the National Endowment for the Arts.
The Executive now raises the possibility of creating new institutions that assume the roles of the organizations that become extinct.
The rule would still allow the privatization of dozens of public companies, partial privatization of a handful of others, and would grant emergency executive powers to eliminate key energy and transportation subsidies.
How has the norm been received in Argentina?
Argentina's unions have strongly rejected Milei's adjustment plan. Just a week ago, tens of thousands of people across the country gathered in a general strike against the reforms under the slogan “The country is not for sale.”
Unions of oil workers, journalists, cultural workers, hospital workers, and science workers participated in the protests; as well as members of neighborhood organizations, human rights organizations and other sectors.
The government minimized the protest, called the unionists “mafiosi” and said it would maintain its “north.”
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On the contrary, Representatives of the productive and commercial sectors of Argentina supported the 'omnibus law' project last week and the decree of necessity and urgency (DNU) to deregulate the economy.
According to a statement from the Presidency, representatives of different chambers and associations that bring together the agricultural, industrial, commercial and communications sectors held a meeting with the Minister of Economy, Luis Caputo, and his economic team, in which They agreed on the need for the country to reach zero deficit.
“Businessmen were called upon to support the Law of Bases and Starting Points for the Freedom of Argentines and the DNU, maintaining that they will allow all sectors to grow exponentially in the medium and long term and genuine employment to be generated,” he indicated. The document.
According to the text, the representatives highlighted the predisposition and openness to dialogue on the part of the Government and agreed to advance an economic emergency program, where each one presented the concerns faced by each sector.
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What support does the law have in Congress?
In principle, La Libertad Avanza, de Milei's strength and with a negligible parliamentary weight, assures that it has the support of allies and opposition sectors that will allow it to achieve the necessary quorum this Wednesday to enable debate in the House this Wednesday.
If it succeeds, it is expected that the debate could last between 30 and 40 hours and it is speculated that the ruling party could count on support. for approval of the project in general, but not to validate certain articles that are the focus of controversy.
As anticipated, the majority of the opposition blocs except Kirchnerism, the left, socialism and the Santa Cruz residents who respond to Governor Claudio Vidal, will vote in general favor of the official project. They would add between 140 and 150 positive votes.
If it achieves approval in the Chamber of Deputies, the project will go to the Senate for treatment. whose members represent the provinces – none of them governed by libertarians.
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What are the articles that still generate debate?
Peronism, which governed until December, and center-right forces, continue to object to the privatization proposals of some 40 public companies, as well as the taking of debt in foreign currency.
One of the points that generates the most suspicion is the transfer of extraordinary powers to the Executive for two years in a wide range of matters, from the economic to the criminal, which would allow him to take many measures without the need for parliamentary approval.
Although the most conflictive core of the initiative – the fiscal package – was postponed for later debate, other articles persist that still generate tension with the ruling party and that promise a heated discussion during its particular debate.
One of them is the one that enables the Executive Branch to declare 36 public companies subject to privatization: Some parties want to shorten the list of privatized companies and, in addition, insist that the process must have some type of active participation from Congress.
Just as the chapter on privatizations generates resistance, the article that repeals the law that establishes limits for the Government to take on debt in foreign currency also provokes rejection.
The legislators will also raise objections in the chapters referring to security – they do not agree with some powers claimed by Minister Patricia Bullrich – and the environment.
When discussing the most conflictive articles, the reporting member of La Libertad Avanza will have the challenge of maintaining their original wording to prevent them from being modified by the opposition.
In the event that this is not achieved and the original article is rejected in the vote, the modifications are immediately put to consideration. suggested by the opposition bloc(s). Any modification, to prosper, needs half plus one of the votes.
In any case, Congress promises more than 30 hours of debate and it seems that it will not make the path so easy for Milei.
INTERNATIONAL EDITORIAL
*WITH AGENCIES AND THE NATION (GDA)
AMERICA DAILY GROUP
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