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ECONOMY | 10-04-2024 14:53

Milei seeks second chance from Congress with scaled-back reform

Government is circulating trimmed down draft version of its sweeping reform bill to lawmakers as Milei seeks to overhaul economy.

President Javier Milei circulated a new, scaled-back version of his sweeping reform bill to Argentine lawmakers, in his clearest tilt toward political pragmatism since taking power. 

The draft floated late Tuesday splits Milei’s plan in parts before he resubmits it to Congress as early as next week.

Since Milei’s original bill was torn apart by the lower house Chamber of Deputies in February, his team has met with congressional members and provincial governors dozens of times to pin down a final text. The drawn-out revision process illustrates Milei’s willingness to listen to lawmakers’ input, a pivot from his previous attempts to ram hundreds of reforms through without prior consensus.

“Today we find ourselves confronted with a second chance. We are confident we are at another level of maturity,” Manuel Adorni, Milei’s spokesman, told reporters Wednesday morning in Buenos Aires.

Milei will expand the tax bracket to include more earners in one fiscal reform bill, complemented by a watered-down omnibus bill with 279 articles — less than half the original version — to privatise or partially privatise over a dozen public companies, notably excluding oil giant YPF SA.

The bill, a copy of which was seen by Bloomberg, also expands the president’s executive powers on energy, economy and finance for one year. It allows Milei to intervene in the nation’s social security agency and special-purpose federal government funds worth millions of dollars. The proposed elimination of the latter triggered fierce opposition from even moderate lawmakers, leading to the original bill’s defeat in February.

Lawmakers from moderate blocs say they still need to review the fine print, however Adorni said the text had won over the most important stakeholders. The bills could go to committee hearings as early as next week.

Interior Minister Guillermo Francos will meet with the country’s biggest umbrella trade union to discuss a new labor reform Wednesday afternoon, which was excluded from the new bills. 

Milei tried to overhaul the country’s onerous labor laws in a sprawling December executive decree, but was blocked by the courts weeks later. A new bill that includes labour reforms could come from the moderate Radicales bloc instead, La Nacion newspaper reported.

In a Bloomberg News interview last week, the president said his 4,000 reforms to deregulate the Argentine state will wait until after next year’s midterm elections if he can’t muscle them through now.

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by Manuela Tobias, Bloomberg

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