Wednesday, July 24, 2024

ARGENTINA | 13-06-2024 19:01

Milei’s bill clears Senate, capping off week of wins

Government eyes end of month lower house session for President’s flagship ‘Ley de Bases’ reform bill and accompanying fiscal package; Victory in upper house comes after chaotic scenes outside Congress.

Six months after being sworn-in as head of state, President Javier Milei is celebrating his most successful week in office.

Late Wednesday night, the libertarian leader’s sweeping ‘Ley de Bases’ reform bill won approval in the Senate by a wafer-thin margin, with Milei’s second-in-charge, Victoria Villarruel, casting the deciding vote.

The following day, new data showed that inflation last month dropped to its lowest level in more than two years.

At press time, it emerged that the International Monetary Fund’s executive board had signed off the last quarterly review of Argentina’s US$44-billion loan programme, paving the way for the release of US$800 million in fresh funds.

That came a day after China agreed to renew US$5 billion of Argentina’s US$18-billion currency swap with the People’s Bank of China. 

The victories are a major boost for Milei, who at the start of the week marked six months in office without a significant legislative victory in Congress.

Following the passage of his flagship reform bill and its accompanying fiscal package, the bill will now return to the lower house Chamber of Deputies for final approval.

On Thursday, Cabinet Chief Guillermo Francos met with the heads of most of the lower house caucuses on Thursday as he sought to follow up on the success and to shepherd the bill through the Chamber of Deputies.

According to senior congressional sources, the representatives agreed to take the bill to the chamber on June 27, towards the end of the month, given that there are three public holidays next week.

A number of key points – such as the pension moratoria and income tax rules – could still be the subject of pushback from the government.

Omnibus arrives

Villarruel’s dramatic casting of the final vote was matched by dramatic scenes outside Congress as federal security forces and police clashed with demonstrators.

The vote came after more than 12 hours of debate. After senators cast their votes – later voting chapter-by-chapter on the bill, which has more than 200 articles – the electronic screen in the upper house showed a 36-36 tie. 

Villarruel, who heads the Senate thanks to her role as Argentina’s vice-president, then delivered the casting blow with a speech that recalled her and Milei’s victory in last year’s presidential election run-off and referenced the violence outside.

"Today we saw two Argentinas: a violent one, which set fire to cars and threw stones, and which debates the exercise of democracy, and another, that of the workers, who are waiting with much pain and sacrifice for the vote that in November last year elected a change," said Villarruel.

"For those Argentines who suffer, who wait, who do not want to see their children leave the country ... my vote is affirmative," said the Senate leader. 

Rejections were cast by Unidad Ciudadana, Frente Nacional y Popular, the Santa Cruz caucus made up of José María Carambia and Natalia Gadano, and the UCR Senator Martín Lousteau.

La Libertad Avanza, which was just seven senators, scraped together enough support, mostly from the UCR, PRO and the Cambio Federal caucuses to swing the vote its way. 

In a statement, the President's Office hailed the "historic approval" of its flagship bill.

The new "is a triumph of the Argentine people and the first step towards the recovery of our greatness, having approved the most ambitious legislative reform of the last 40 years," read a statement.

"The executive branch highlights the patriotic work of the senators who contributed their positive vote to the approval of this law, and hopes to continue counting on their commitment to leave behind the politics of failure and misery," the report added.

Amendments and clashes

The ruling party was forced to allow amendments to the bill to secure its passage. It gave ground on privatisations, removing Aerolíneas Argentinas, Correo Argentino and Radio y Televisión Argentina (RTA) from the list of state firms to be sold off, and powers relating to the dissolution of cultural bodies and institutions.

It also allowed changes to a pension moratorium and alterations to foreign exchange rules within its RIGI (Régimen de Incentivo para Grandes Inversiones) scheme designed to attract overseas investors.

In a show of thawing tensions, the government also agreed to include an article that would allow the completion of public works that are 80 percent finished or that have international financing, handing them over to provinces so they could restart them.

The final vote came at the end of a long day that saw protesters demonstrating in rejection of the bill outside Congress clash with the security forces.

Scuffles broke out earlier when protesters tried to bypass a system of fences set up between them and Congress. Officers used rubber bullets and pepper spray against the rioters, who responded by lobbing stones at the police.

At least 30 arrests were reported by City Police after demonstrators threw rocks and thenn flipped and set fire to at least two vehicles in the vicinity of the National Congress building. 

Police and Border Guards responded with water cannons and tear gas.

Five opposition Peronist deputies, who attended the demonstration, received medical attention after being tear gassed by the security forces. Dozens of others were treated for injuries at the scene,

Later, as night fell, thick blocks of shield-bearing officers and others on motorbikes pushed back protesters. Pot-banging demonstrations were heard throughout the capital.

Buenos Aires City Mayor Jorge Macri claimed Thursday that the damage to the capital after a night of demonstrations and violence outside Congress totals 278 million pesos.

"Don’t tell me yesterday’s was a peaceful demonstration. The only thing they did was break and vandalise what belongs to all of us. Why should us citizens of Buenos Aires foot the bill? In our administration, you break it, you pay for it,” stated the mayor.

Opposition lawmakers accused the security forces of heavy handedness and of escalating a situation that was mostly calm.




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