Argentina’s Javier Milei Wins Senate Approval for Economic Reforms

Buenos Aires, Argentina – Javier Milei, the outspoken libertarian lawmaker, has secured Senate approval for a package of economic reforms that aim to shake up the country’s struggling economy. Milei’s proposal, dubbed the “Milei Plan,” includes a series of measures designed to reduce government spending, cut taxes, and promote economic freedom. Among the key reforms are: * A reduction in the size of the government by 15% * A flat income tax rate of 15% * The elimination of the value-added tax (VAT) * The introduction of a gold-backed currency Milei has argued that these reforms are necessary to boost economic growth, create jobs, and reduce inflation, which has been a persistent problem for Argentina. The approval of Milei’s plan by the Senate is a significant victory for the libertarian movement in Argentina. It also reflects growing dissatisfaction with the country’s traditional political parties and economic policies. However, the reforms face significant challenges. The government has stated its opposition to some of the proposals, and it remains to be seen whether the reforms can be implemented in practice. Nevertheless, the Senate approval is a symbolic moment for Milei and his supporters. It demonstrates the growing influence of libertarian ideas in Argentina and raises hopes for a more prosperous future for the country. Milei has vowed to continue advocating for his reforms and has urged the government to embrace them. He has also called on the people of Argentina to demand change and to hold the government accountable for implementing policies that will benefit all citizens. As the debate over the Milei Plan continues, it remains to be seen whether the reforms will ultimately lead to the economic revival that Argentina desperately needs.

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FT+editor+Roula+Khalaf+selects+her+favorite+stories+in+this+weekly+newsletter.

Argentina’s+Senate+narrowly+approved+a+pair+of+wide-ranging+reform+bills+that+give+President+Javier+Milei+a+much-needed+first+legislative+victory+amid+mounting+economic+and+political+pressures+six+months+into+his+term.

Senate+President+Victoria+Villarruel,+Argentina’s+vice+president,+used+a+deciding+vote+to+give+general+approval+to+the+first+bill,+which+includes+investment+incentives,+a+plan+to+privatize+some+state-owned+companies+and+an+expansion+of+presidential+powers+over+some+policies.+economic.

A+separate+bill+aimed+at+cutting+Argentina’s+fiscal+deficit+was+also+passed+on+Thursday,+although+lawmakers+scrapped+a+key+article+that+aimed+to+restore+the+income+tax+for+high+earners+after+it+was+scrapped+last+year.

Both+bills+were+greatly+watered+down+from+the+government’s+original+proposals+in+an+attempt+to+pass+the+Senate.++Both+face+a+final+vote+in+the+lower+house,+where+some+Senate+amendments+could+be+repealed+but+are+now+likely+to+become+law.

“This+is+a+triumph+for+the+Argentine+people+and+the+first+step+toward+recovering+our+greatness,”+the+president’s+office+said+in+a+statement+after+the+vote.

Milei,+who+controls+less+than+15+percent+of+congressional+seats,+has+until+now+relied+on+the+executive+branch+to+cut+public+spending+and+deregulate+Argentina’s+economy+by+decree.++Analysts+have+said+he+needs+to+pass+longer-term+legislative+reform+to+restore+investor+confidence+and+pull+the+country+out+of+a+serious+economic+crisis+that+has+pushed+annual+inflation+to+289+percent.

“Without+(these+bills)+the+next+few+months+would+have+been+very+turbulent+for+both+markets+and+political+conflicts,”+said+Lorena+Giorgio,+chief+economist+at+consulting+firm+Equilibra.++“With+this,+we+have+a+better+chance+of+getting+out+of+the+crisis+without+problems,+although+it+is+by+no+means+assured.”

He+added+that+the+investment+incentive+plan+would+encourage+the+flow+of+dollars+into+the+country,+an+important+factor+in+the+government’s+plans+to+eventually+lift+Argentina’s+strict+foreign+exchange+and+capital+controls.

In+another+boost+for+Milei+on+Wednesday,+Argentina’s+central+bank+announced+it+had+reached+a+deal+with+Chinese+authorities+to+refinance+around+$5+billion+in+debt+payments+due+next+month,+easing+pressure+on+its+dangerously+low+reserves.+currency.

The+passage+of+Milei’s+bill+comes+on+the+heels+of+a+resounding+defeat+in+the+lower+house,+where+leftist+and+centrist+lawmakers+last+week+challenged+the+government+to+approve+an+increase+in+pension+spending+that+would+cost+0.4+percent+of+GDP.

While+Milei+has+pledged+to+veto+any+bill+that+jeopardizes+his+“zero+fiscal+deficit”+plan,+the+vote+suggested+the+opposition+could+reach+the+two-thirds+majority+needed+to+override+a+veto.

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Such+challenges+have+partially+reversed+a+rally+in+Argentina’s+sovereign+bond+prices+over+the+past+month+and+contributed+to+volatility+in+the+black+market+peso+exchange+rate.

Market+analysts+said+Wednesday’s+vote+would+boost+bonds+and+the+peso.

Ana+Iparraguirre,+a+partner+at+Buenos+Aires-based+strategic+group+GBAO,+said+approval+of+the+bill+would+not+be+enough+to+dispel+“a+big+question+mark+that+has+arisen+over+Milei’s+ability+to+implement+its+plans,”+and+that+the+Legislation+will+likely+face+fierce+battles+in+the+fractured+Congress.

The+defeat+of+the+restoration+of+the+income+tax,+a+tax+that+is+very+important+to+the+finances+of+Argentina’s+23+provinces,+may+continue+to+strain+relations+with+their+powerful+governArgentina’s Javier Milei, a libertarian economist, has secured Senate approval for a package of economic reforms aimed at boosting growth and reducing poverty. The reforms, which passed with a comfortable majority, include tax cuts, deregulation, and a reduction in the size of the public sector. Milei, who is a vocal critic of the current government’s economic policies, said the reforms would help to create a more prosperous and equitable Argentina. He argued that the country’s high levels of taxation and regulation were stifling economic growth and preventing businesses from creating jobs. The reforms have been welcomed by some economists, who believe they could help to boost Argentina’s economy. However, others have expressed concern that they could lead to increased inequality and social unrest. The reforms are expected to be implemented in the coming months. It remains to be seen whether they will be successful in achieving their stated goals.