Javier Milei has officially begun the dissolution of the Argentine state. Surrounded by his ministers, the far-right president presented this Wednesday a decree that repeals laws, abolishes dozens of government regulations, allows the privatization of public companies such as the oil company YPF and opens the door to operations in dollars. It is also about making the labor market and the healthcare system more flexible. The new regulations will remain in effect at least until the decree is reviewed by Congress, where the ruling party is in the minority. A negative vote from both chambers is required for rejection.
In a 15-minute speech, Milei listed 30 of the nearly 300 reforms included in the text, which will be published in the Official Journal. This includes repealing laws that forced companies to ensure internal supplies of food and forced supermarkets to display the lowest prices for some basic products. It also abolishes regulations for promoting industry in disadvantaged areas, the rent law that provided for semi-annual increases for tenants, and laws preventing the privatization of public companies.
Protest against pots and pans in Buenos Aires after the advertisement of Milei.Tiago Ramírez
From today, football clubs can be joint stock companies, foreigners have no restrictions on purchasing land and transactions can be conducted freely in dollars.
The healthcare system will also undergo important changes. Private insurance companies will be able to set their prices freely in the future, while a more flexible regulatory framework will apply to union-affiliated insurance companies (so-called social insurance companies). In addition, electronic medical prescriptions are being introduced with the aim of simplifying processes and reducing costs.
The decree opens Argentina's protected market to the world by eliminating many of the rules that hindered imports and exports. Argentine industry, which has had little internal competition for years, will be one of the most affected sectors, as was the case during Carlos Menem's neoliberal decade (1989-1999).
Milei began his speech, which was broadcast in prime time on national radio and television, with a long diatribe against politicians – whom he called a deified “caste” – and the left, which he again accused of causing millions of deaths around the world have. The right-wing extremists will also submit to Congress a series of laws with changes that cannot be made by presidential decree. “MPs will have to decide whether they want to be part of the change or obstruct the most ambitious reform process of the last 40 years to make Argentina a world power again,” he threatened. He will not wait until the start of the legislative year in March but will call extraordinary sessions.
One of Milei's workhorses is the deregulation of Argentina's labor market, which maintains very favorable rules for white-collar workers, 30% of the total. Several governments have tried and failed to reform labor laws, but the new president wants to try again. The decree attacks those aspects of the regulations that do not require congressional approval, such as the extension of the probationary period before new hires and alternative compensation mechanisms to the current ones.
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Milei became president with Argentina's record 56% vote and is using that support to urge lawmakers to agree to the policy change “for which the people voted.” But he governs in a very polarized society and with powerful unions and organizations ready to take to the streets against any restrictions on rights. The first demonstration took place on Wednesday afternoon, when more than ten thousand people occupied the center of Buenos Aires as part of a huge police demonstration to protest against the announced major cuts in public spending of around $20 billion.
Hours later, after the reading of the presidential decree, the protest was revived among the urban middle class. Outraged neighbors expressed their disapproval by banging pots and pans off balconies in Buenos Aires and other major cities across the country. One by one, demonstrators gathered on the main streets of each neighborhood and hundreds of them decided to march together to the entrance to the convention, where many drivers honked their horns in a show of support. Such demonstrations became popular in 2001, when the worst economic and social crisis in Argentina's modern history erupted.
The opposition strongly condemned a decree that aims to transform Argentina into a liberal state overnight. One of the most critical voices from Peronism was that of the governor of Buenos Aires, Axel Kicillof: “[Milei] It proposes to privatize everything, to deregulate everything, to destroy workers' rights, to destroy entire sectors of production, to raffle off football clubs and the assets of Argentines. All this without going through Congress, which could meet and discuss it. He emphasized that he had neglected to say: “Democracy: Out!” The left called on the unions to go on a general strike.
Congress can reject Milei's decree of necessity and urgency by a majority vote in each chamber. If only one of them agrees, the decree is valid, just as if none of them edits it. While this happens, the new regulations apply.