The Argentine Senate rejected Javier Miley's deregulation bid

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The Argentine Senate rejected President Javier Miley's sweeping emergency decree to liberalize the economy, in a heavy blow to the liberal leader and his attempt to introduce reforms to the crisis-hit country.

Senators voted by 42 votes to 25 to reject the decree, with four abstentions. Released in December, it amends or eliminates more than 300 regulations affecting the rental housing market, food retailers, air travel, land ownership, and more.

Miley, a political outsider elected in November, is struggling to overcome a hostile Congress to enact his agenda of radical change. His La Libertad Avanza (LLA) coalition controls less than 10 percent of the Senate seats, and was unable to win over centrist opposition lawmakers, most of whom voted on Thursday with the left-leaning Peronist opposition movement, which controls 45 percent of the vote. Senate seats. .

Several centrist lawmakers said the measure does not meet the requirements for an emergency decree under the Constitution, and that Miley should introduce his deregulation reforms as bills.

The decree will remain in effect until it is also rejected by the House of Representatives, where Miley holds 15% of the seats. Its survival depends on negotiations with opposition representatives there.

Amilcar Colante, an economics professor at the National University of La Plata, said the outcome would threaten investors' confidence in Miley's government and could put downward pressure on Argentine sovereign bond prices and the peso.

“This is a concern for the market because the president is on the verge of losing… the only set of substantive economic reforms he has been able to deliver so far,” he said.

Miley actually chose to withdraw the other item on his legislative agenda — a sweeping, multifaceted bill aimed at reforming the Argentine state — from the House floor last month after lawmakers rejected several key articles.

The president and his government launched a new effort to pass a scaled-down version of the omnibus bill this month, beginning intense negotiations with Argentina's 23 powerful provincial governors, who control lawmakers.

The text of the new draft law, which was shared with lawmakers on Thursday, contains 269 articles aimed at privatizing state companies, expanding the powers of the president and replacing the system for calculating pension increases, among other things.

Juan Negri, a professor of politics at Torcuato de Tella University in Buenos Aires, said the defeat puts Miley in a “much weaker position,” while the governors, none of whom belong to the LLA, “feel more empowered” as they go through those negotiations. .

Miley has so far managed to deflect attention from his political weakness, but it is now highly exposed. . . Other politicians will try to pile on.”

However, Negri noted that the success of Miley's reforms would ultimately depend on his ability to quickly reduce inflation in Argentina, which has an annual rate of 276 percent. He added: “If he can do that, he will be able to consolidate popular support and try to get political support again.” “The economy will determine its identity.”