Argentina's Senate approved President Javier Milei's critical reform bill and fiscal package on June 14, 2024, despite significant alterations. The approval came amid violent protests against the bill outside the legislature. Milei's pro-market agenda and its potential impact on the country's future are highlighted [205708d0].
The Senate backing is critical for Milei, as it signals his ability to win over conservative and centrist allies despite his libertarian party only having a small minority of seats in Congress. The government had to negotiate hard-to-win support and make changes to the investment incentive plans. Milei's shock therapy includes devaluing the peso, reducing state subsidies for fuel, and cutting government ministries. The reduction in public spending has helped Argentina swing from a fiscal deficit to a surplus. However, inflation remains high, and the economy has contracted sharply [205708d0].
The protests against Milei's economic reforms have been ongoing, with hundreds of thousands of demonstrators taking to the streets to voice their opposition. The protesters argue that the budget cuts to public universities and the reduction in state intervention will negatively affect education and economic development. They see free public higher education as a pathway to greater equality and access. The government's handling of the protests has been a subject of criticism, with some arguing that the public university system has become inefficient and politically biased, while others maintain that the cuts are necessary to stabilize the economy and reduce the national debt [d161ddb8].
The government's ability to negotiate and build consensus is being tested daily. Argentina's economic mismanagement over the years and its decline serve as a cautionary tale. The government is focusing on agricultural exports to boost the state's financial credibility. However, the Argentine economy is at a tipping point, and public support for Milei's policies is waning. The shine is coming off, and the economy will struggle [205708d0].
Despite the protests, Milei's reform agenda has made progress with the passage of the bill in the Senate. However, the bill still requires approval from the lower house before it can become law. Milei's coalition holds a minority of seats in Congress, which may pose challenges to the bill's final approval. The upcoming debates and votes in the lower house will be critical in determining the fate of Milei's proposals and the future of Argentina's economic reforms [cf174667].
The passage of the reform bill is seen as a significant step towards implementing Milei's economic program. If successfully implemented, the reforms could attract foreign investment, stimulate economic growth, and stabilize the country's financial situation. However, the success of these reforms will depend on gaining legislative approval and overcoming political and economic challenges. The next few months will be crucial in assessing the progress and potential of Argentina's economic experiment under President Milei [9f55f732].