Argentina’s economic crisis – shock therapy in a hurry: Milei’s big test in parliament – News

Argentina’s new president wants to get the economic crisis and the inflation rate of over 160 percent under control with shock therapy. He is counting on far-reaching changes. Milei wants to enforce his policy through emergency law. Critics warn that this is anti-democratic.

Javier Milei can’t do whatever he wants. Even if it might seem that way at first glance. In the first three weeks of his government, Milei decided on three far-reaching changes: First, he announced shock therapy: ten emergency measures that apply immediately. The president devalued the national currency, the Argentine peso, by half.

Second, Milei signed a far-reaching emergency law decree. It changes a number of laws or even repeals them. For example, the decree restricts the right to demonstrate and strike and declares that state-owned companies will be privatized.

Our constitution does provide that the president can be given far-reaching powers – but not for such a long period of time. This contradicts the principle of separation of powers – which is also anchored in the constitution.

Third, Milei then presented parliament with a voluminous legislative package – the so-called Ley Omnibus. The package includes over 660 articles and provides for an expansion of emergency law. It should be valid until the end of 2025 and can then be extended for another two years. In an extreme case, Milei could rule by emergency law for his entire term as president, four years, bypassing parliament.

This violates the Argentine constitution, says Tomás Múgica – political scientist at the Universidad Católica Argentina: “Our constitution stipulates that the president can be given extensive rights – but not for such a long period of time. This contradicts the principle of separation of powers – this is also anchored in the constitution.”

Argentine court slows Milei down

There are already lawsuits against Milei’s actions. A court recently declared Milei’s emergency labor market reform invalid in the first instance. An appeal is likely and additional lawsuits are pending.

Milei’s politics are being fought not only in court, but also in parliament: in extraordinary sessions, parliament is now supposed to either confirm or overturn Milei’s emergency decree and the Ley Omnibus – all of this, if possible, by the end of January.

«A large part of society and parliament support Milei’s policy in substance – the liberalization of the economy. But they don’t agree with the way he’s doing it. “They don’t want the president to have unlimited power,” says expert Múgica. Milei, on the other hand, wants to restructure the entire state: from criminal to civil to tax law.

Only partial support for Milei’s politics

“There are a number of different interests at stake for different groups. It’s complex. I therefore do not believe that Parliament will simply wave the Ley Omnibus through. And the emergency law decree will probably change it too. Because there is only partial approval for Milei’s policies,” says the political scientist.

And Milei’s party, La Libertad Avanza, doesn’t have a majority in parliament anyway. The most likely scenario is that Parliament will correct course, weaken Milei’s reforms and slow down his policies somewhat.