Milei’s Omnibus Economic Reform Package Gets Senate Nod, Expected To Become Argentina Law

Mr. Milei’s office calls it ‘the first step towards the recovery of our greatness’

AP/Natacha Pisarenko
An anti-government protester holds an Argentine flag by police at Buenos Aires, June 12, 2024. AP/Natacha Pisarenko

President Milei’s sweeping economic reform “omnibus” bill received Senate approval on Wednesday and is expected to be passed into law imminently. 

Formally named the “Law for the bases and starting points for Argentines’ freedom,” the 183-page bill declares a state of emergency on economic, financial, administrative, and energy-related issues, granting Mr. Milei legislative authority over these topics for one year.

The 72-seat senate narrowly approved the bill after Vice President Victoria Villarruel broke the 36-36 deadlock. Mr. Milei’s La Libertad Avanza party holds just seven seats in Congress, and depended on support from the center-right Propuesta Republicana and centrist Unión Cívica Radical for the bill to pass.

The lower chamber will now review the 328-article bill with the senate’s concessions, where it is expected to be granted final approval today after months of legislative pushback. 

The bill’s approval will be a major legislative win for Mr. Milei, who has not managed to pass any laws since he came into office. 

Mr. Milei’s office hailed the bill as a “triumph” for Argentinians after it was passed in the Senate, describing it as “the first step towards the recovery of our greatness, having approved the most ambitious legislative reform of the last 40 years.”

The libertarian president was also quick to give credit to his free market heroes, who played a big role in forming his vision for Argentina’s political economy.

“For the first time in history, against all odds, a law of reforms inspired by the Austrian School of Economics is being carried out. The postulates of Mises, Hayek, Rothbard and Kirzner are beginning to come true,” he said on X. “Long live Argentina!”

The Austrian economists’ philosophical account of anti-interventionism formed the core of Mr. Milei’s political platform. 

“The conceptual clarity of the Austrians is superlative and dominates the rest of the schools in a very strong way,” he said in a 2017 interview. For Mr. Milei, economics “should stop being the science of scarcity management and become the study of human action under radical abundance.”

The bill is part of Mr. Milei’s mission to make Argentina more attractive to businesses and investors, and is critical to the president’s vision to reform and recover the country’s bloated economy, with inflation still at a staggering 300 percent.

According to a report by Bloomberg, investors reacted positively after the bill was passed in the senate, as Argentina’s sovereign dollar bonds were “the best performers in emerging markets with notes due 2029, 2030, 2035, and 2046 climbing at least 2 cents on the dollar.”

Mr. Milei first attempted to pass the bill in February, but the lower chamber of congress approved a diluted version on April 30. The current version makes further concessions about the privatization of public companies, pensions, and tax benefits for investors, according to a report by Latin News.

State owned Aerolíneas Argentinas, as well as post offices or public press companies, will now be exempt from privatization.

While Senators engaged in a prolonged debate in congress, thousands of protesters took to the streets, setting fires to cars and throwing Molotov cocktails as security forces pushed back with tear gas and water cannons.

Numerous teachers, truckers, and other union laborers surrounded the congressional building for most of the day, beating drums and saying “Our country is not for sale,” and “we will defend the state.” 

In response to the vote and the protests, Ms. Villarruel said that the Senate had seen “Two Argentinas: a violent Argentina that sets a car on fire, throws rocks and debates the exercise of democracy, and another Argentina with workers waiting with great pain and sacrifice for the change that they voted for.”

One Peronist political party, Diputados UP, condemned the “repression” of the riot police during the protest, saying the bill’s approval was “a sad day for democracy.” 18 demonstrators are currently in police custody, and several opposition lawmakers who were in the crowd are in a nearby hospital to treat burns to their eyes and skin, Al Jazeera reported.

Since Mr. Milei took office in 2023, he has cut more than 50,000 government jobs by eliminating many public agencies, suspended new public works contracts, and abolished many fuel and transport subsidies, after vowing to cut public spending during his campaign.

The New York Sun

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