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ARGENTINA | 14-03-2024 20:31

Blow for Milei as Senate rejects sweeping mega-reform decree

President's sweeping deregulation DNU rejected by senators in upper house; Emergency deregulation decree now heads to lower house Chamber of Deputies, where it must also be voted down if it is to be repealed; Tensions reported between head of state and Victoria Villarruel, his vice-president.

President Javier Milei's sweeping reform plans suffered a major setback on Thursday as the Senate rejected his sweeping economic deregulation mega-decree.

Tensions ran high in the upper house as the ruling La Libertad Avanza and its allies sought to save Milei’s DNU decree of “necessity and urgency” modifying and repealing hundreds of rules and laws. 

But the decree, issued by the president back in December soon after taking office, was voted down by senators with 42 votes against, 25 in favour and four abstentions.

Minutes after the vote, Milei was retweeting posts from users on the X social network that described the vote as "the political caste versus the Argentine people." Another described the legislators who voted against the bill as "traitors to the country."

The decree "is still in force, it will go to the [lower house] Chamber of Deputies and we will see how this story continues," declared pro-government Senator Ezequiel Atauche (Jujuy).

To be repealed, the DNU needs to be rejected by both the upper and lower house of Congress. 

Emergency decrees are not normally rejected, especially in a president’s first year in office, but Milei’s sweeping reform plan has raised the ire of many lawmakers who feel its targets are too broad.

"The DNU is unconstitutional and that is the only thing we have to evaluate. And I'm not saying it myself, the whole spectrum of constitutional experts in Argentina are saying it," said Senator Martín Lousteau (Unión Cívica Radical, UCR) during the debate.

Multiple local news outlets also reported that tensions were also boiling over within President Milei’s own party, with the head of state said to be angry at Vice-President Victoria Villarruel’s decision to allow debate to go ahead.

Villarruel, who is also head of the Senate, has dodged for several weeks requests from the dominant Unión por la Patria (UxP) bloc, led by José Mayans, and other federal blocs, who have repeatedly called for the decree to reach the Senate floor. 

They argued that the limits for it to be discussed in committee stage had already been breached and that the legal deadline for its treatment was passed a month earlier.

La Libertad Avanza is firmly in the minority in both chambers of Congress. It is barely the third-strongest force in the Senate.

Thursday’s much-anticipated debate comes after the failure of Milei’s other major reform package, the so-called ‘omnibus bill,’ a wide-ranging initiative that collapsed in the lower house Chamber of Deputies last month. 

The president has redrawn the bill, slashing it in size by half, and began sending the new version to provincial governors this week to ensure greater support before it reaches Congress.

Upon taking office on December 10, Milei issued a raft of measures, including devaluing the peso by 50 percent, cutting subsidies for transport and energy and halting infrastructure projects.

Milei has repeatedly stated "There is no money" and has warned that the economic crisis, also marked by sky-high inflation, will get worse before it gets better.


No ‘easy passage’

The reform decree, known as DNU 70/2023, was issued by Milei last December 21 and is already in force. It contains 366 articles and repeals key legislation, as well as delivering substantial changes to a number of key economic, labour and institutional matters. 

Emergency decrees are not normally rejected, especially in a president’s first year in office.

"It is likely that it will be rejected," political consultant Carlos Fara said prior to Thursday’s debate. And, if this happens, "it will not have an easy passage" in the Chamber of Deputies.

Fara said that the DNU's rejection in the lower house would constitute "a huge blow" for the Executive.

Presidential Spokesman Manuel Adorni claimed Thursday that if the decree is rejected in Congress, the government has "plan B and plan C."

Among the dozens of laws that are repealed by the DNU are rules governing the rental market, which prevented the negotiation of contracts in foreign currency, as well as rules limiting the increases that private medical firms could impose on their clients. It also removes price controls on the prices and paves the way for the privatisation of major state firms. 

Thursday’s debate "will serve to show who are those who are in favour of change in Argentina and who are those who are against it," declared Milei in a radio interview this week

The DNU “proposes to give more freedom to Argentines and give more competitive market structures and put an end to the theft of politics," he claimed.

Milei’s office complained that the “hasty” treatment of the decree “violates the spirit of agreement promoted by the president.”

The president has repeatedly insulted and criticised his critics since taking office, most often on the X social network.

The decree, which already faces dozens of legal challenges, also contemplates a sweeping labour reform that was suspended by the courts in January pending a Supreme Court ruling.

The nation’s highest tribunal, which has also been petitioned to intervene by the government of La Rioja Province, has said it will deal with the issue after the judicial holidays, which ended a few weeks ago.

The message was interpreted as a sign that Congress should deal with the matter first. However, on Wednesday, a statement from the president’s office complaining that it had been sent for debate declared that the Supreme Court is “close to a definition.”

 

Tension at the top?

The DNU debate has been made more spicier by reports on unrest between Villarruel and Milei, who fired up the rumour mill himself with a statement slamming the “unilateral decision of some sectors of the political class” and accusing enemies of “advancing with their own agenda.”

"The national government hopes that the legislative branch will not be captivated by the siren song of those who want to 'score' short-term victories," the communiqué added.

Presidential Spokesperson Manuel Adorni denied reports of unrest on Thursday at his daily press conference, saying the remarks had been misinterpreted, despite Milei liking posts on social media that were implicitly critical of his second-in-command.

New La Libertad Avanza deputy José Luis Espert suggested Wednesday that Villarruel may be seeking to destabilise the government.

"In the light of what is happening, it raises doubts in my mind, because if DNU 70/23 were to fall, it would be a strong blow," he said.

"The vice-president had other alternatives. I don't know why she did it. I would have to ask her what she thinks," said Espert during a television interview.

Milei and Villarruel have reportedly been at odds over a number of issues, including last week’s row over the authorisation of pay hikes for workers and legislators at Congress. The president sought its immediate reversal, but his vice-president is said to have stalled before reluctantly adhering to his request.

This, however, is said to be only the latest chapter of the conflict, which dates back to the start of government. During his successful presidential campaign, Milei said that Villarruel would be handed control of the Defence and Security ministries. However, he eventually gave them to two figures from the Juntos por el Cambio coalition, Luis Petri and Patricia Bullrich, who are not part of La Libertad Avanza and unsuccessfully competed against the libertarian duo for the Presidency.

 

– TIMES with AFP, PERFIL
 

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