Javier Milei achieves a pyrrhic victory with approval in Congress of his reforms

Javier Milei achieves a pyrrhic victory with approval in Congress of his reforms

The Argentine Senate approved in the early hours of Thursday a package of liberal reforms proposed by Javier Milei that gives a signal of governability to the marketsalthough the Upper House introduced extensive modifications to the rule and rejected tax changes by the ultra-liberal president.

In an extremely even vote – the president of the Senate had to break the tie -, The ruling party achieved the approval of the “Bases Law” despite being in a large minority in the Senate, in the midst of massive protests outside Congress which led to incidents with injuries and burning cars.

Although the project had already been approved by the deputies at the end of April, it will now return to that chamber to discuss the changes made by the senators.. The Lower House can approve or reject the bill, but not introduce new changes.

The approval boosted the local currency on Thursday, Argentine bonds in dollars and shares of companies from the southern country listed in the United States.

It is emblematic to have shown that such a minority force in both chambers can achieve the approval of such an important law.“said the Chief of Staff, Guillermo Francos.

To achieve the support of many opponents, The Government agreed to modify the original draft of the voluminous regulation, which promotes broad benefits for multimillion-dollar investmentsthe privatization of public companies, money laundering and special powers for the president.

The Senate also rejected modifications to taxes on high salaries and personal assets, contained in a tax reform discussed separately.

“We ended up voting for a better law than the one that came from the Deputies. There were things that couldn't happen like that,” Senator Guadalupe Tagliaferri, from the opposition Republican Proposal (PRO), told Radio Con Vos.

Many senators voted in favor of the law in general terms, but promoted changes in some points of the project with which Milei intended to achieve investments to boost a declining economy. and reduce inflation of more than 250% annually. Peronism and other opposition parties voted mostly against.

Milei had tried to approve the law at the beginning of the year, which then contained a much broader package of initiatives that ended up being rejected by Congressso now it decided to cut the standard.

Among the changes that the Government granted to the opposition to achieve its approval, The modifications in the investment promotion regime and the elimination of the list of companies to be privatized of Aerolíneas Argentinas, Correo Argentino and the RTA public media system stand out.

“We see what happened in the Senate during the early hours of today as positive, given that most of the articles of the laws were approved with relatively benign changes,” Balanz Capital highlighted in a report. “We believe that this scenario is positive for prices,” he concluded.