After six months of debates, comings and goings, the Argentine Congress approved the so-called “Basic Law”, which proposes a series of economic reforms in the country, and which for the president Javier Milei This marks the beginning of a new stage in his government.
“The zero fiscal deficit phase is over, now we are moving towards the zero emissions phase. Now comes the change in the monetary regime,” the president told the LN+ channel after learning the results. He also added, full of enthusiasm, that Argentina is starting to resemble Germany, France and Italy.
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The result was defined in the early hours of this Friday, the 28th. A favorable result was already estimated, as it was a package of economic reforms limited in relation to its original version. The Senate introduced some changes that were approved by the Chamber of Deputies with 148 votes in favor, 107 against and 2 abstentions.
With this result, Javier Milei will have legislative powers for one year, incentives for large investments, more flexible labor legislation and authorization to privatize a dozen public companies, among other points.
“The national government achieved the approval of the first law for the free and prosperous country that Argentines chose,” proclaimed a statement from the presidency.
For international analyst Jorge Negri, this is the first political victory for Javier Milei’s government.
“We are talking about a party that has around 10% of the seats in Parliament and that is still capable of passing legislation with very ambitious content, in just six months, despite having had to compromise a lot. In other words, it is a much more limited norm.”clarifies The trade the professor at the Torcuato Di Tella University.
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Does this mean a change in government versus opposition?
For Argentine political scientist Alexandra Morales, this does not necessarily imply “a conciliatory narrative, a political narrative different from the one that has been used until now”.
“I believe that the issue of negotiation and political agreements continues to be one of the great weaknesses of this president, but understanding how important it was to be able to achieve the agreement and obtain a majority in the Basic Law, what he did was a change within his own office.”the analyst from the political scientists network No sin Mujeres tells this newspaper.
In this case, he highlights that it was Minister Guillermo Francos who led the agreements, and who has the most political experience.
Second stage: monetary change?
“Now comes the change in the monetary regime”Milei highlighted this during an interview with LN+. What does this change mean? It is worth remembering that Argentina has an economy in recession and inflation of 280% per year as of May, according to the AFP news agency. Furthermore, it suffered a 5.1% collapse in Gross Domestic Product in the first quarter of this year and has more than half of its population in poverty.
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For the two analysts consulted by this newspaper, Milei’s statement still contains few details. The “Basic Law” package still needs to be regulated to determine the next steps.
Negri indicates that it would not be as drastic a change as had been planned. “What I believe is that the government will move towards making capital flows more flexible, perhaps by eliminating multiple exchange rates, but the details of all this are not clear. “One of the government’s flags in this new monetary regime talks about exchange rate competition, and not about some kind of flexibility in the idea of dollarization.”Explain.
The idea of monetary change also goes hand in hand with a second phase, announced by Milei.
“Fiscal consolidation is underway, the zero deficit phase has passed. Now we move to the zero emission phase. Monetary regime change is coming. “What we want is for the broad monetary base to no longer vary.”announced the president to the Argentine press.
Morales points out that this is where Federico Sturzenegger’s name appears, and what he would do would be “implement all articles approved in the Basic Law.”
New ministry and Sturzenegger
After the approval of the Basic Law, among the Argentine president’s announcements is the creation of another ministry. Although the name has not yet been defined, in an interview, the head of state indicated that it will be a “ministry that will be in charge of carrying out the reforms”.
Later, the EFE agency reported that presidential spokesman Manuel Adorni stated that the name of the new ministry has not been defined. He added that he will be “responsible for accelerating and implementing everything that has to do with deregulation and bureaucratic cleansing.”
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However, if it were a ministry, for Morales it would be “somewhat contradictory”. It was President Milei himself, when he was on the campaign trail, who opposed having too many ministries and created the Ministry of Human Capital, which concentrated the ministries of Education into just one; of Social Development; of Labor, Employment and Social Security; and of Women, Gender and Diversity.
“We must not forget the ideological bases of Javier Milei and where he does not believe in the State, he even believes in its elimination, so it is somewhat contradictory, so we have to see if the announcements he made really seek to be much more media-friendly”, highlights the political scientist.
What is confirmed is that the person who will lead this position will be Federico Sturzenegger, former president of the Central Bank of Argentina (2015-2018) during the government of Mauricio Macri (2015-2019). In addition, he played a central role in the design of the economic reform package promoted by Milei.
“He is a person who is very committed to deregulation, that is, trying to eliminate the entire web of rules and articles that regulate the economy. Argentina is a very regulated economy, very closed, full of enormous amounts of devices. With that, I would have a portfolio explicitly oriented towards the debureaucratization and deregulation of the economy,” comments Jorge Negri.
For now, the next steps that the Argentine president must take are the promulgation of the Basic Law, regulation and its implementation.
Source: Elcomercio
I am Jack Morton and I work in 24 News Recorder. I mostly cover world news and I have also authored 24 news recorder. I find this work highly interesting and it allows me to keep up with current events happening around the world.
