Argentina: Pres. Milei to Veto Pension Reform Bill

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Facts

  • Argentine Pres. Javier Milei said on Friday he would veto a pension reform bill estimated to increase pension spending by between 0.44% and 1.2% of the gross domestic product, with his office reasserting his pledge to 'maintain a fiscal surplus at all costs.'[1][2][3]
  • The bill, passed by the Senate in a 61-8 vote, includes cost-of-living adjustments for pension benefits. The minimum monthly pension is nearly $233, while the cost of the basket of goods and services used to measure inflation costs more than $300 a month.[4][5]
  • According to the presidential office of Argentina, the pensions reform is an 'irresponsible, illegal and unconstitutional bill' approved in an 'act of demagogic populism' that disturbs the country's fiscal balance.[3][5]
  • A possible presidential veto can be overridden if a two-thirds majority supports the bill in both houses of Congress — where the ruling La Libertad Avanza coalition controls less than 15% of the seats.[6][4][3]
  • Earlier this year, Milei signed a decree changing the pensions formula to link them to inflation and to give a one-off 12.5% increase in April to compensate for the 71.3% cumulative inflation since December 2023.[7][2]
  • The approval of the pension reform bill comes after the lower house Chamber of Deputies rejected a proposed spending increase of 100B pesos ($103.5M) for intelligence services.[2]

Sources: [1]Reuters, [2]Buenos Aires Times, [3]Financial Times, [4]Bloomberg, [5]Associated Press, [6]Al Jazeera and [7]Buenosairesherald.

Narratives

  • Left narrative, as provided by Peoplesdispatch and EL PAÍS English. The brutal austerity program of the self-declared anarcho-capitalist Javier Milei has so far increased poverty to 55% and further aggravated annual inflation. And yet he continues to attack pensioners as if destroying their purchasing power was a silver bullet for solving Argentina's economic issues.
  • Right narrative, as provided by The Telegraph and Daniel Lacalle on X. Milei took over a country in the depths of unprecedented economic and political turmoil, and he's already turning it around in six months. His market-based reforms are saving Argentina, and a veto on this new pension formula is the only way to protect the real purchasing power of pensions.

Predictions