Thursday, April 18, 2024
Perfil

ECONOMY | 02-03-2024 00:26

Milei seeks pact with political leaders in bid to save reforms

In his first annual address to lawmakers on Friday, Milei invited leaders from all parties to sign a 10-principle agreement that includes a “non-negotiable fiscal balance” and public spending cuts, as well as labour reform and free trade.

President Javier Milei proposed a pact with Argentina’s powerful province governors and other top political leaders as he seeks to protect his austerity measures and liberalising reforms from an increasingly hostile Congress.

In his first annual address to lawmakers on Friday, Milei invited leaders from all parties to sign a 10-principle agreement that includes a “non-negotiable fiscal balance” and public spending cuts, as well as labour reform and free trade. He proposed the pact be signed in the province of Córdoba on May 25, and said he intends to meet all provincial governors before that date. 

Milei’s reforms are at risk in Congress as a growing number of senators threaten to vote down a decree he introduced in December with several measures to deregulate the economy, including steps to privatise companies, facilitate exports and end price controls. Last month, he pulled back a separate package of proposals from Congress after realising he had insufficient votes to approve them. 

During his hourlong speech, the libertarian leader warned legislators trying to resist his legislative overhaul that he will fight back and is willing to pay whatever political costs necessary.  

“If you’re looking for conflict, you’ll all have conflict,” he said to the applause and cheers from supporters in the rafters of Congress. “We’re not negotiating the change, and we’re going to make good on our promise to society — with or without the support of the political class.” 

Shifting between threatening language and olive-branch proposals, Milei said his top deputies would reach out to governors to seek an agreement on his 'omnibus bill' reform package in exchange for fiscal relief, without providing details.

Milei addressed the legislature after weeks of escalating tensions. He had been shaming legislators since January after they started voting against his omnibus bill, the centrepiece of his reforms. He also called Argentina’s Congress “a rat’s nest” at a recent event and started taunting a governor from an allied political party over funding disputes between the federal government and provinces. 

He told the Financial Times earlier this week he won’t resubmit his massive omnibus bill until December 2025, emphasising he can rely on decrees to implement enough of his economic agenda until midterm elections.

With annual inflation of 250 percent, Milei outlined a haunting social portrait of Argentina during his congressional address. He cited private estimates that nearly 60 percent of the country is living in poverty, while 70 percent of children can’t complete basic mathematics. He insisted that Argentina has no options other than his drastic policy mix.

“Today we find ourselves before an inflection point,” Milei told lawmakers. “When we find ourselves with an obstacle, we’re not going to turn back, we’re going to keep accelerating.”

related news

by Patrick Gillespie, Bloomberg

Comments

More in (in spanish)