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Argentina’s libertarian President Javier Millay unveiled a sweeping emergency decree on Wednesday night to rapidly deregulate the country’s economy, sparking protests and setting the stage for a defining political battle.
The decree includes 300 measures repealing key regulations covering Argentina’s rental housing market, customs export agreements, land ownership, food retailers and others. It also changes rules for the airline, healthcare, pharmaceutical and tourism sectors to encourage competition.
Employee benefit packages will be cut and the probationary period for new hires will be extended, while companies will no longer pay fines for failing to register workers.
The new rules, which take effect on December 29, also change the legal status of the country’s state-owned companies, which include an airline, media companies and energy group YPF, allowing them to be privatized.
“Today we are taking our first step to end Argentina’s pattern of decline,” Millay said in a pre-recorded broadcast. “I signed an emergency executive order to begin dismantling the oppressive institutional and legal framework that has destroyed our country.”
The decree marks the fulfillment of Millay’s campaign promise of a sharp end to the extensive regulations, high taxes and expanding public sector introduced by the left-leaning Peronist movement over the past two decades. Its implementation, however, would pit libertarians against the Peronists in Congress and their allies in Argentina’s powerful labor unions.
“Disregarding the separation of powers, he is announcing a decree that, without urgency or necessity, repeals all kinds of laws,” said Axel Kitchiloff, the influential Peronist governor of Buenos Aires province. “It is proposed to privatize everything, deregulate everything, destroy workers’ rights and wipe out entire manufacturing sectors.”
After the broadcast, Buenos Aires residents banged pots and pans on their balconies and in public squares in protest. Thousands attended an impromptu rally outside Argentina’s Congress building, chanting: “Our country is not for sale!”
Opposition politicians accused the president of issuing the new mandates by decree to bypass a vote in Congress, where his La Libertad Avanza coalition holds just 15 percent of the seats in the lower house and less than 10 percent of the Senate.
Under Argentina’s constitution, presidents can issue “decrees of urgency and necessity” in most policy areas – with the exception of tax, criminal and electoral matters and rules for political parties – when “extraordinary circumstances make it impossible to follow normal procedures”. The executive orders remain in effect until both houses of Congress vote to repeal them.
Margarita Stolbiser, a lawmaker with the non-Peronist centre-left Gen party, said the decree was “abusive and unconstitutional”. “The legislature is going to have to scrutinize every part of this,” she added.
Analysts said the unprecedented scope of the presidential order made it difficult to predict whether the measures could be implemented.
Eugenia Michelstein, an associate professor at the University of San Andres in Buenos Aires, said the decree could be the “opening blow” of a battle with Congress, with the government potentially sending a series of bills to Congress to legalize parts of the package.
“The strategy can be to throw as much as possible at the wall to stick some of it,” she said.
Among the most controversial measures for lawmakers will be easing labor and health regulations, she said.
Millay claimed that the 56 percent of the vote he secured in November’s election gave him a mandate for drastic reforms in Argentina’s economy.
Public reaction to the decree, especially among moderate voters, would be vital to his ability to win over Congress and implement his reforms, said Christian Bouthier, director of public opinion firm CB Consultora
“To the audience [tolerance] as this bold maneuver will largely depend on Milei starting to deliver economic results,” he said. “This is the oxygen Miley needs to keep progressing.”