The Senate in Argentina has approved a pension increase to match the country’s triple-digit inflation rate, defying President Javier Milei. Milei is set to veto the pension reform passed by the Senate, further widening the rift between the libertarian leader and the opposition-controlled Congress. The bill, which aims to increase pension spending in line with inflation, was passed by a 61-8 vote in the Senate, with most lawmakers against it from Milei’s party. Milei has promised to maintain a fiscal surplus and strike down legislation that undermines his austerity measures.
Milei, who took office in December, has relied on executive decrees to implement his economic policies due to his party’s limited presence in Congress. His strict austerity measures have led to a fiscal surplus, but have also resulted in a deepening recession, increased poverty, and soaring inflation. The pension reform, which sets an 8 percent increase in retirement benefits, is seen as a threat to Milei’s radical agenda and has raised concerns among investors about his ability to implement his policies.
The passage of the pension law is viewed as a defeat for Milei and highlights his weakness in Congress, where leftist and centrist lawmakers hold sway. The bill’s impact on Milei’s fiscal programme may further exacerbate the economic challenges facing Argentina. Critics argue that the negative streak in Milei’s policies is a result of his inner circle’s confrontational approach. Despite Milei’s efforts to maintain a fiscal surplus, the economic situation in Argentina remains precarious, with widespread protests against his agenda.
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