The basic bill has been passed by the Argentine Senate and House of Representatives, marking President Milei’s first victory in the legislature since taking office in December 2023. Consisting of hundreds of provisions and an accompanying financial package, the bill allows the government to promote privatising several state-owned corporations and companies, reform labour laws and pension regimes, and offer incentives to attract foreign investment. The bill also “gives the green light” for the President to declare a state of economic emergency for one year and disband federal agencies.
After many months of persistently pursuing “austerity” measures and receiving support from international financial organisations, the Argentine Government has achieved positive results but also had to make many trade-offs.
Immediately after the bill was passed by parliament, President Milei declared that this was a turning point for the South American country, helping to stabilise the economy, promote growth and create a legal foundation for the government to continue implementing reform policies, including radical monetary policy reform.
President Milei and the governors of 18 provinces signed an agreement with several contents, known as the Social Pact, which emphasised the goals of ensuring a balanced budget, sharply cutting public spending and reforming taxes and labour. Observers say this agreement will help ease concerns about the ability to resolve the most serious Argentine economic crisis in decades.
After many months of persistently pursuing “austerity” measures and receiving support from international financial organisations, the Argentine Government has achieved positive results but also had to make many trade-offs.
Although the Argentine Government has partly restrained price increases, reducing the budget deficit and aiming for a surplus, the economy and people have suffered severe impacts. The measures were deemed "shocking", causing poverty to increase and the economy to stagnate. The International Monetary Fund (IMF) forecast that Argentina's GDP in 2024 will decrease by 3.5%.
The Bill is considered the "key" to President Milei's economic reform plan. However, the Argentine Government made concessions when it had to remove or adjust many provisions in the original bill. While the legislature was studying and voting, opposition parties and some social organisations in Argentina opposed the bill's passage and staged protests.
Some opinions say that the bill goes against the interests of workers and poor people, and only serves multinational corporations and businesses. This will make the gap between rich and poor and social inequality increasingly serious.
The reform measures received approval from many local governments, but it took President Milei many months to convince the majority of governors to sign the Social Pact. Meanwhile, several governors social organisations and trade unions in Argentina have refused to participate in this agreement.
It can be seen that finding more support is one of the important tasks for President Milei in the coming time. Also because it only holds a minority position in the bicameral National Assembly, Milei's Liberal Advancement Party (LLA) has encountered many obstacles in calling on other political parties to support the agenda pursued by the LLA.
Argentina is at a turning point and people expect change. Therefore, President Milei's administration still needs to make more efforts to achieve ambitious reform goals, to help the country overcome current difficulties and address the challenges ahead.
