Argentine President Javier Milei's economic reforms were signed into law and immediately went into effect on Monday, marking the beginning of an era of privatization and deregulation aimed at revitalizing the country's struggling economy.
Milei, alongside Chief of Cabinet Guillermo Francos and Minister of Economy Luis Caputo, signed the comprehensive reform package and its accompanying fiscal package this morning.
"Argentina is immersed in a serious and deep economic, financial, fiscal, social, pension, security, defense, tariff, energy, health and social crisis without precedent, which affects all levels of society and the very functioning of the State," the omnibus bill states. The extensive document is made up of over 200 articles that broadly deregulate and reform these sectors.
The first measure of the bill empowers Milei to declare a state of emergency "in administrative, economic, financial, and energy matters" for one year. It also includes multiple measures aimed at improving "bureaucratic efficiency" and transparency. For example, it mandates automatic approval if the administration fails to respond to citizen requests within a specific time frame.
Other key aspects of the bill include relaxed labor protections, a trial period for new employees, the disbanding of federal agencies, the privatization of dozens of public companies, and the introduction of tax and foreign exchange incentives to attract investments.
Over six months after taking office, Milei has finally secured the legislative tools he needs to carry out his campaign promises of deregulation and deficit reduction. But this achievement only comes after months of struggling with Congress, heated debates, and violent protests.
Milei first presented his reform package to Congress last December, only to face rejection in February. After revising the package and reducing the number of articles from 600 to 232, Congress approved it in April. The Senate narrowly passed the bill in June, amid widespread violent protests urging lawmakers to reject the proposal.
The current reform package only represents about 20 percent of the structural changes Milei's administration deems necessary to fix the country. But with these initial reforms now law, Milei has announced the "second phase" of his war against inflation and deficit.
Last Friday, Milei established the Ministry of Deregulation and State Transformation, led by former President of the Central Bank Federico Sturzenegger. The ministry, reports El País, aims to reduce public sector employment, eliminate bureaucracy, and privatize certain state-run activities, including public works. The ministry's first task is to eliminate or modify a set of regulations, known as Ley de Hojarascas, "that hinder the functioning of the economic system." It also plans to remove numerous restrictions on air travel operations.
Milei has invited top national politicians to San Miguel de Tucumán to sign a 10-point accord intended to help "Argentina move forward." The "Pact of May" is set to be signed at midnight tonight at the historic site where Argentina's declaration of independence was signed 208 years ago.
The pact includes a commitment to private property and "non-negotiable fiscal balance," a reduction of public spending, improvements to the public education system, a tax reform that "reduces the tax burden," a labor reform that "promotes formal employment," and the opening of international trade, among other measures.
However, several governors, Supreme Court members, former presidents, and other lawmakers have already indicated that they will either not attend the meeting or do not plan to sign Milei's declaration, according to Infobae.
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