Argentine President Javier Milei's resistance to negotiations with the moderate opposition in the National Congress on some points of the draft “Bus Law” announced in early January, a package with 664 articles on 183 pages, was shortlived.
A day after his return from Davos, Switzerland, where he delivered an aggressive speech to the business elite in attendance at the World Economic Forum in which he attacked socialism, feminism and the environmental agenda, the Argentine president finally bowed to reality and made several concessions to the To speed up the passage of the bus law.
The change in strategy gives an idea of how isolated Milei found himself after just 40 days in office. Through interlocutors, he approved changes to more than 100 articles of the law, published this Friday, January 19.
Judging by the concessions, one can say that Milei has cut his own teeth and torn up part of his ultraliberal playbook.
Among the changes proposed in the bus law, the Argentine president gave up some of the special powers he had given himself, agreed to give pensioners inflationadjusted adjustments, and not only refrained from privatizing the state oil company YPF, but this also delegated to Congress the final say on the privatization of another 41 companies under state control.
The aboutface comes as the administration rushes to pass the package in Congress by Wednesday, January 24, when a general strike called by unions the first of his administration promises to paralyze the country.
In practice, the concessions dissipated some of the effect that Milei had achieved with the very tough measures he had taken since taking office to reorganize Argentina's economy.
These include a larger fiscal adjustment than analysts expected, an adjustment in food, transport and fuel prices of up to 100%, a sharp exchange rate depreciation, rapid accumulation of reserves and even an advance agreement with the International Monetary Fund (IMF).
Under the pressure of inflation which reached 25.5% in December compared to the previous month and ended 2023 with an increase of 211% Milei released two packages within a few days, including the Necessity and Urgency Decree (DNU), which is on deregulation targets the economy, which changed 366 laws in addition to the bus law.
“We do not negotiate anything, we only accept suggestions for improvement,” said the Argentine president in the first week of the year.
Reduction of superpowers
The negotiations in Congress are led by the President of the Chamber of Deputies, Martín Menem (from the same party as Milei), by the Minister of the Interior Guillermo Francos and by the presidential adviser Santiago Caputo with three moderate opposition parties, including the traditional União Cívica Radical (UCR).
In the original wording of the bus law, Milei would receive “superpowers” that could be given to the executive branch for two years and extended for another two years, i.e. for the entire term.
The duration of the special powers has now been shortened to one year and can be extended for another year if Congress approves. In addition, the list of planned emergencies was also reduced, with Milei losing legislative autonomy without ensuring satisfaction in the social, defense and health sectors.
Other changes reached key points in the package. One of them concerns the pension reform to adjust the salaries of pensioners, which overturned the previous system of the Alberto Fernández government.
The negotiated change calls for pension salaries to be updated based on the previous month's Consumer Price Index (IPC). In other words, retirees and retirees would receive a 25.5% increase in February, which is in line with December's consumer price index.
Other points that attract attention include the decision to leave voting reform to discussion in Congress and the promise to remove from the package the article that, based on the traffic law, banned meetings of more than three people on public streets.
Despite this concession, Milei is still cracking down on the unions and is preparing a series of measures to persecute anyone who joins the general strike called by the General Confederation of Labor (CGT) at the end of December.
The measures being examined include reducing working hours for civil servants and setting up a hotline for reports from entrepreneurs, traders and workers who allegedly feel forced to take part in the strike.
Last week, Milei called on Argentine social organizations and unions to pay up to 56 million pesos (around R$320,000) for security measures carried out during demonstrations in December following his inauguration.
It remains to be seen whether Milei will resort to these measures in the coming days to secure a majority in Congress to pass the bus bill.
After all, it would no longer be the first concession by the Argentine president, who from now on will have to do much more to adapt to the political game he so despises.