“The stage of zero fiscal deficit has already passed, now we are going to the stage of zero emission. Now comes the change of the monetary regime,” said the president in after the result was known. He even added, full of enthusiasm, that Argentina is beginning to resemble Germany, France and Italy.

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The result was decided in the early hours of Friday 28th. A favorable result was already expected, since it is a package of economic reforms limited to its original version. The Senate introduced some modifications that were approved by the Chamber of Deputies with 148 votes in favor, 107 against and 2 abstentions.

With this result, Javier Milei will have legislative powers for one year, incentives for large investments, a more flexible labor law and the authorization to privatize a dozen public companies, among other points.

“The national government has succeeded in approving the first law towards the free and prosperous country that the Argentines have chosen,” proclaimed a statement from the presidency.

The Argentine Congress approved the Ley Bases after a long debate that lasted until dawn. (Photo AFP)

For international analyst Jorge Negri, this is the first political victory of Javier Milei’s government.

“We are talking about a party that has approximately 10% of the seats in Parliament and that is still capable of approving legislation with very ambitious content, in just six months, even though it had to give in a lot. That is, it is a norm that is much more limited”clarifies to Trade the professor at the Torcuato Di Tella University.

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Does this mean a change in government versus opposition?

For Argentine political scientist Alexandra Morales, this does not necessarily imply “a conciliatory narrative, a political narrative different from the one that has been used until now.”

“I believe that the issue of negotiation and political agreements continues to be one of the great weaknesses of this president, but understanding how important it was to be able to carry out the agreement and to be able to obtain the majority in the Base Law, which he did “It was a modification within his own cabinet.”the analyst from the network of political scientists No sin Mujeres tells this newspaper.

In this case, he points out that it is Minister Guillermo Francos who led the agreements, and who has more political experience.

Second stage: monetary change?

“Now comes the change of the monetary regime”Milei pointed out during the interview with LN+. What does this change mean? It is worth remembering that Argentina has an economy in recession and inflation at 280% annually in May, according to the AFP news agency. In addition, it suffered a 5.1% collapse of the Gross Domestic Product in the first quarter of this year and has more than half of its population living in poverty.

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For the two analysts consulted by this newspaper, Milei’s statement still has few details. The “Ley de Bases” package still needs to be regulated in order to know the next steps.

Negri indicates that it would be a change not as drastic as had been planned. “What I believe is that the government will move towards a flexibilization of capital flows, perhaps the elimination of multiple exchange rates, but the details of all that are not clear. One of the flags of the government in this new monetary regime speaks of currency competition, not some sort of flexibilization of the idea of ​​dollarization.”Explain.


The “Bases Law”

This is one of the largest legislative packages proposed by President Javier Milei. Alexandra Morales points out that it contains 238 articles, it is quite plural, and there is intervention in 11 different areas of the Executive. It proposes investment incentives, removes some tax issues, and also proposes the privatization of state companies and organizations, “despite the fact that in the midst of the negotiation, some of the most important, Aerolíneas Argentinas and the public media companies, have been left behind. out”. It also grants legislative powers to the government for a limited period.

The "Basic Law"

The idea of ​​monetary change also goes hand in hand with a second stage announced by Milei.

“Fiscal consolidation is underway, the zero deficit stage has already passed. Now we are moving on to the zero emission stage. The change in monetary regime is coming. What we are aiming for is for the broad monetary base to remain unchanged.”the president told the Argentine press.

Morales points out that this is where the name of Federico Sturzenegger appears, and what he would do would be “implement all the articles that have been approved from the Bases Law.”

New ministry and Sturzenegger

After the approval of the Base Law, among the Argentine president’s announcements is the creation of another ministry. Although the name has not yet been defined, in an interview, the head of state indicated that it will be a “ministry that will be in charge of carrying out the reforms.”

Federico Sturzenegger is a renowned Argentine economist, with academic and political experience.  He has been designated as "brain" of the "Law Bases".  (Photo: AFP)

Federico Sturzenegger is a renowned Argentine economist, with academic and political experience. He has been designated as “the brain” of the “Bases Law.” (Photo: AFP)

Later, EFE reported that presidential spokesman Manuel Adorni said that the name of the new ministry has not been defined. He added that it will be “in charge of accelerating and implementing everything that has to do with deregulation and bureaucratic cleanup.”

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However, if it were a ministry, for Morales it would be “somewhat contradictory.” It was President Milei himself, when he was in the electoral campaign, who was against having many ministries and created the Ministry of Human Capital, which concentrated those of Education in just one; of Social Development; of Labor, Employment and Social Security; and Women, Gender and Diversity.

“We do not have to forget the ideological bases of Javier Milei and where he does not believe in the State, he even believes in its elimination, which is why it is somewhat contradictory, so we have to see if the announcements he made actually seek to be much more media,” highlights the political scientist.

What is confirmed is that the person who will lead this office will be Federico Sturzenegger, former president of the Central Bank of Argentina (2015-2018) during the government of Mauricio Macri (2015-2019). In addition, he has had a central role in the design of the package of economic reforms promoted by Milei.

“He is a person very committed to deregulation, that is, trying to eliminate the whole web of rules and articles that regulate the economy. Argentina is a very regulated economy, very closed, full of enormous amounts of devices. With that, he would have a portfolio explicitly oriented to that, the debureaucratization and deregulation of the economy,” Jorge Negri points out.

For now, the next steps that the Argentine president must take are the promulgation of the Basic Law, the regulation and its implementation.