Milei accepts around 100 changes to his mega-reform bill in search of consensus in Congress

The president of Argentina is hoping to secure support from the political center and right this week so his ultraliberal project to privatize the economy and defund the state can move to the Senate

Javier Milei
Javier Milei at the Davos Economic Forum (Switzerland), on December 17.Hollie Adams (Bloomberg)
José Pablo Criales

The government of Argentina has given in to the opposition and eliminated more than 100 articles from its massive reform-oriented bill in a bid to build consensus in Congress. Among other things, President Javier Milei has taken off the oil company YPF from the list of state companies that he intends to privatize, and he has agreed not to charge export duties on agricultural production in provinces far from Buenos Aires. With an extensive list of modifications to the original bill, the far-right administration is hoping that its ultraliberal project to defund the state will get greenlighted by the special committees reviewing it, so that it can go to a formal vote by lawmakers later this week.

Congress has been in extraordinary sessions for two weeks discussing the omnibus law that Milei sent to legislators on December 28 to fundamentally change a good part of the political, social and economic structure of Argentina. The 664 articles of the original text have tensed the summer vacation season in Argentina, where society has discussed with almost the same intensity as Congress the implications of a reform that contemplates everything from the special powers of the executive to take on foreign debt without permission from the legislative branch, to deciding by decree the calculation of pensions, defunding the National Film Institute (INCAA) and reforming the legal system so that judges are made to wear a robe and use a hammer during trials.

The reform had run aground in Congress without finding consensus: last Friday the deadline for the special committees to send the bill to the Lower House expired and, without obtaining the necessary votes, Milei extended the deadline for the legislative sessions by decree. Congress will meet again in ordinary sessions in March, but it has until February 15 to discuss the mega-bill. The government hopes that its new reforms will secure approval from the center-right blocs — the PRO of former president Mauricio Macri, the centrist Radical Civic Union, and a broad bloc of federal Peronists and splinters of minority forces — that would guarantee the approval of the project.

Milei has agreed to reduce the period of “public emergency” with which he sought to provide the executive with legislative powers for two years pending an extension for two more — practically an entire hypothetical first term — to a single year, extendable to two if Congress approves it. The government party, La Libertad Avanza (Freedom Advances), has eliminated the state-owned YPF from the list of 41 public companies that it wants to privatize, and has accepted that others, such as Banco Nación or the satellite company ARSAT, will only undergo a “partial privatization.” The flagship airline, Aerolíneas Argentinas, the railways, the post office and public media, such as the Télam news agency, may still be privatized. The government has also accepted a change in the financing of pensions: the executive wanted to give itself the power to decide on increases by decree, but now it is offering to maintain the quarterly increase due to inflation until March and, from April, a monthly adjustment according to the Consumer’s Price Index.

We have not yielded on anything, there are improvements that we have accepted,” said President Javier Milei on Monday morning. Cultural industry workers have most recently joined the protests against the fiscal adjustment that have brought workers, retirees and tenants to the streets these days. On Monday, protests by film industry workers against the defunding of the INCAA and the closure of the national film school were echoed by more than 300 producers, directors and actors from around the world, including the Spanish film director Pedro Almodóvar and Mexico’s Alejandro González-Iñárritu, who published a letter denouncing the “devastating, incalculable and irreparable effect” of the law against audiovisual production. “Either we use state resources to finance films that no one watches, or we use that money to feed people,” the president responded.

In the new version of the reform bill, the INCAA will maintain a specific allocation of funds and the government will reverse its decision to close the National Fund for the Arts, which finances scholarships for artists. The Milei administration has also eliminated one of the most controversial points of its original bill, which envisioned prison for what it termed illegal demonstrations, meaning meetings of “three or more people” in public spaces to protest government initiatives. But Milei has doubled down in other matters, such as prohibiting “political activity” by public officials, which now includes all government employees.

The government is confident that its bill can be approved this week in the lower chamber and move to the Senate. Milei has stated that he hopes Congress will discuss the project on Thursday, one day after the general strike called by the General Confederation of Labor that will include the mobilization of unions and social groups at the doors of Congress.

The fact that the congressional debate and the massive protest are both called for Wednesday will serve to measure the degree of social support that the government alleges to justify the need for its economic reforms. Despite being a minority in Congress, the Milei government has been warning for weeks that the adjustment for workers will be even harsher if other political parties do not back its shock policies. With inflation at 25% last December, the popular support on which the government relies looks like it is beginning to falter.

According to a study by the University of San Andrés, 40% of Argentines reject Milei’s economic policies, while 38% do agree with them. But, regarding specific points of the mega-bill, this study clearly shows that up to 60% reject the privatization of state companies, the delegation of powers to the executive, special permits for the government to take on debt, or the reform of environmental laws. According to the study, the most popular measures in the bill have nothing to do with the economy: more than half of Argentines welcome charging non-resident foreigners for public education, easing prison sentences for uniformed officers who act in “legitimate defense,” and simplifying divorce proceedings. Those are in fact the only measures that enjoy majority support.

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