Daily Reports
Argentine Senate Faces High-Stakes Vote on Controversial Bases Law
Argentina is once again on the brink of significant legislative action as the Senate gears up to vote on President Javier Milei's highly debated Bases Law. This law, a cornerstone of Milei's economic agenda, aims to dramatically reshape the country's political and economic landscape by dismantling the state and privatizing public companies, making economic and labor regulations more flexible, and providing tax benefits to large businesses.
The proposed law is a condensed version of the original and ambitious project that Milei's administration initially presented. Out of the 664 articles in the initial draft, only 232 remain after modifications in the Chamber of Deputies and further tweaks by the Senate committees. Even with these reductions, the law still includes controversial measures such as the privatization of crucial public entities like Aerolíneas Argentinas, Radio and Television Argentina, and passenger and freight railways, as well as the reinstatement of the Income Tax and the Incentive Regime for Large Investments (RIGI).
Inside the Senate, Chief of the Cabinet of Ministers Guillermo Francos leads the government's efforts to secure the required votes. Milei’s party, La Libertad Avanza, has aligned with the PRO party led by former president Mauricio Macri, and seeks additional support from the Radical Civic Union (UCR) and other provincial groups. However, this coalition still faces strong opposition, particularly from 33 Peronist senators from Unión por la Patria, making the outcome uncertain.
Complicating matters further are the demonstrations scheduled outside the Congress. Led by political, social, and union organizations mostly aligned with Peronism and the left, the protests aim to voice strong opposition to the Bases Law. Leaders like Pablo Moyano from the General Confederation of Labor (CGT) and human rights groups have declared that the law would undermine social and economic rights. The government has warned of potential repression, with Security Minister Patricia Bullrich announcing a significant police presence to manage the protests.
The Bases Law is not the only item on the Senate's agenda. A fiscal package, which includes the restoration of the Income Tax and various tax reforms, will also be debated. For Milei’s administration, securing legislative approval for both measures is crucial to their broader goal of making Argentina a market-driven economy. Failure to pass the Bases Law would be highly damaging, both politically and economically, especially with President Milei being conspicuously absent as he participates in the G-7 summit in Italy and attends a peace meeting in Switzerland hosted by Ukrainian President Volodymyr Zelensky.
- The Bases Law also proposes a one-year public emergency in administrative, economic, financial, and energy matters. This would give the Executive broad powers to dissolve, merge, split, or transfer state organizations.
- Key senators have expressed apprehensions about the delegated powers within the law. Radical Civic Union's Pablo Blanco and others have stated they would not support these provisions due to a lack of trust in the government.
- Martin Lousteau's parallel opinion does not include delegated powers or declare an emergency, contrasting with the government’s proposal.
- Privatizations, especially of Aerolíneas Argentinas, Correo Argentino, and Radio y Televisión Argentina, are contentious points. Some senators argue that privatization may lead to reduced services to less profitable destinations, impacting regions like Tierra del Fuego.
- The opposition also wants to remove these key companies from the privatization list to protect other entities like Aysa and Ferrocarril Belgrano Cargas from being sold off.
- The Incentive Regime for Large Investments (RIGI) has drawn substantial criticism, with opponents arguing it is overly favorable to investors and could harm local businesses and investors.
