At the start of Thursday, the financial markets celebrated Javier Milei's decree that deregulates the Argentine economy in one fell swoop. The shares of local banks registered increases of up to 13% on the Buenos Aires stock market, sovereign bonds in dollars traded higher on Wall Street and the country risk fell almost 40 points. But the party was punctured as the day progressed and dark clouds grew on the horizon: the decree must overcome a complex obstacle course. The resistance encountered in Congress, in Justice and in the streets can frustrate the president's plans to dismantle the State through hundreds of repeals and regulatory modifications. The dispute that lies ahead in the face of this unprecedented challenge will be long.
“The first interpretation should be positive. However, given that there are many sectors that will file complaints before the courts, the question about sustainability remains latent,” stressed the Adcap financial group. Other stock market operators initially applauded the pro-market spirit of the new regulations, but also moderated their enthusiasm while awaiting the reaction of legislators and judges, who have the final say. For now, it is clearly adverse.
Decrees of necessity and urgency (DNU) are an exceptional constitutional mechanism regulated since 1994. In a scenario of natural or social catastrophe, they allow the Executive to dictate or modify laws to address an urgent matter that cannot wait for debate in the Congress. Among constitutional lawyers there is a consensus that this is not the case of the decree signed on Wednesday by Milei, which includes reforms that are neither necessary nor urgent. They denounce that the president assumed powers that correspond to the Legislative Branch, a criticism also repeated by a large part of the opposition.
Milei won with 56% of the votes in the second round. He was accompanied by more than 14 million Argentines who wanted a change of course that would take the Argentine economy out of a decade of stagnation, increased poverty and inflation. But his behavior in the first days of the Government has raised alarm bells throughout the entire Argentine institutional system. “The decree violates practically everything. Even if you like the content, what fails here is the form,” condemns constitutional law professor Daniel Sabsay.
Among the more than 300 measures decreed by the far-right president, the prohibition on the State intervening to control the prices of food, basic goods, rent and private health insurance stands out: the decision will be in the hands of businessmen and owners. Public companies may be privatized, football clubs converted into public limited companies and foreigners will no longer have a limit on purchasing land in Argentina. Contracts will be accepted both in Argentine pesos and in any other currency.
From now on, it will be much more difficult for workers to strike and much easier to be left on the streets. On the other hand, the outlook improves for employers: no one will fine them if they have employees hired irregularly or if they work hours of up to 12 hours per day. Banks will be able to hide credit card fees from their clients and the national industry will no longer be protected by tariffs.
Democratic risk
“Governing in this way, democracy is in danger,” warns lawyer and jurist Roberto Gargarella, who opposes the restrictions imposed on the right to protest and this mega decree, which he considers unconstitutional. Gargarella emphasizes that any government must comply with the law, no matter how much it may not like it, and is surprised that a president who came to power with a parliamentary minority and without union support has signed a decree of such magnitude without first negotiating it. “There are many legislators who could agree with part of the text, but it has generated a lot of anger that it went over Congress,” he says.
Peronism as a whole, now in opposition, has expressed a total rejection of the text. “This is a policy of surrendering the country that benefits ten living people, not the slightest consideration for the people,” declared this Thursday the head of the Peronist bench in the Senate, José Mayans. The criticism is also forceful from the moderate sector of the conservative coalition Together for Change. “Not like that,” Horacio Rodríguez Larreta concluded on social networks. The former mayor of Buenos Aires and former presidential candidate has stressed that Argentina needs profound reforms but “they will only be successful if they can be sustained over time, and if they have legal and constitutional solidity that guarantees their implementation.”
![Horacio Rodríguez Larreta with the now Minister of Security, Patricia Bullrich, on August 13 in Buenos Aires.](https://imagenes.elpais.com/resizer/x74otIUm2nWB5GEEtdwAJ7vWSxA=/414x0/cloudfront-eu-central-1.images.arcpublishing.com/prisa/SJVZSHNTRKBENG6AJTGNFIWABU.jpg)
Majority of the two chambers
The Legislative Branch votes on the entire DNU. It's an all or nothing order. To repeal it, it requires the negative vote of the majority of both Houses. It is enough for one of them to vote in favor or even not to deal with it for the decree to remain in force, according to the regulations imposed during the Kirchner regime in 2006. None of the presidential decrees signed since then have been repealed in Congress, but the de Milei could be an exception, according to Gargarella: “The move has been so provocative, so without seeking agreements with anyone, that for the first time in history it is possible for the two Chambers to come together in the repeal of a decree.” Even so, he believes that it is possible for him to pass this test and sees it as more likely that the annulment will come through judicial means. “In judicial terms, this will be annulled as soon as possible, especially in light of the Court's jurisprudence,” he predicts.
“Without a doubt it is going to be judicialized,” agrees the lawyer, judge and politician Ricardo Gil Lavedra. Unlike the political route, which must treat the decree as a closed book, the judicial route can tear it into pieces. Gil Lavedra is convinced that in the coming days numerous presentations will be made by the different affected groups before the Argentine courts. Rulings in the first instance may be appealed by a higher court and so on until reaching the Supreme Court, in a path that could take months, even years. The highest court does not have deadlines to issue its ruling, he warns. High judicial sources consulted by EL PAÍS also rule out that the Court resorts to legal shortcuts such as per saltum to be dispatched as soon as possible.
“What gives predictability to a system is compliance with the Constitution. It is very important that everything is done within the framework of the Constitution and this decree escapes those parameters,” laments Gil Lavedra. Along the same lines, constitutionalist Andrés Gil Domínguez believes that the emergency situation defended by the Executive is not sustainable. On the contrary, he believes that it is a decree “that affects the division of powers” and seeks to “impose a political project.”
Political and judicial obstacles may increase if the incipient citizen protests grow. On Wednesday night, thousands of people staged a spontaneous cacerolazo in rejection of the measures read by Milei on the national network. First they went out to the central avenues of many cities in Argentina and later they gathered at the doors of the Argentine Congress, in Buenos Aires. This Thursday and Friday there are new protest actions called against the Government, but on Saturday the roles will be reversed and the streets will belong to those who defend it. The polarization of Argentine society, less than two weeks after Milei takes office, is more extreme than ever.
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