The Argentine Congress is set to vote on President Javier Milei's "Ley de Bases" bill, a legislative initiative aimed at radical economic reform. The bill, which has already passed both houses with amendments, includes provisions for privatization and special powers for the president during a declared state of emergency.
Milei's proposal seeks to privatize state institutions and promote private investment, although the Senate has removed key state-owned companies like Aerolíneas Argentinas, Correo Argentino, and the public media system from the list of potential privatizations. The amendments also moderate tax benefits for large investments and eliminate changes to taxation on high salaries and personal property.
Argentina is currently grappling with a severe economic crisis characterized by budget deficits, high debt, and a bloated state apparatus. Milei's austerity measures, which include cutting public sector jobs and reducing subsidies, aim to transition the country towards a free-market economy. However, these measures have also led to a decline in economic output, with the IMF predicting a 2.8% contraction this year.
The bill's approval is seen as a critical test of Milei's ability to govern. Despite having a minority in both houses, Milei has garnered support from the center-right bloc, while the left-wing Peronist opposition remains fragmented. Analysts believe that the opposition is unlikely to block the bill, although they may attempt to delay its implementation through legal means.
The Chamber of Deputies now faces the decision to either accept the Senate's amendments or revert to the original version passed in April. The outcome of this vote is uncertain, with different factions within the opposition holding varying positions on the amendments. The conservative PRO party supports the original articles, while the Unión Cívica Radical (UCR) party may hold the decisive votes.
- The "Ley de Bases" bill, also known as the "omnibus" due to its volume, includes tax benefits for multi-million dollar investments and provisions for money laundering. The bill was initially rejected when Milei took office in December, but after extensive negotiations and reducing the original 600 articles to 238, a consensus was reached.
- During a vote on June 13, widespread street protests erupted as the Senate debated the bill. The exclusion of state-owned companies from privatization was a key concession made to secure the bill's approval. Additionally, changes were introduced to moderate the tax benefits included in the investment regime known as "RIGI".
- Deputies are not required to approve or reject the Senate's changes in their entirety; they can accept modifications to some articles and reject others. Constitutional experts have raised concerns about the potential unconstitutionality of reestablishing rejected articles, which could lead to judicial challenges if the deputies approve the regulations while rejecting the Senate's changes.
