2023-12-21 17:20:46
It took 15 minutes and 20 seconds to summarize 366 articles written in 83 pages. The new Argentine president Javier Milei announced on television the signing of the Decree of Necessity and Urgency (DNU), which provides for a massive reform of laws and the deregulation of numerous economic regimes. Although he did it without a chainsaw, the consequences will be radical in many cases and will affect both the macro and microeconomics (that of families).
“Today we formally begin the path of reconstruction. We have been focused on trying to contain the enormous crisis that we inherited,” Milei said surrounded by members of his Government and by someone who is not, Federico Sturzenegger, who was president of the Central Bank with Mauricio Macri.
“Today we begin the path of reconstruction… focused on trying to contain the enormous crisis that we inherited.”
“We designed a shock stabilization plan that includes a fiscal adjustment program, an exchange rate policy that adjusted the exchange rate to market value and a monetary policy that includes the sanitation of the Central Bank,” summarized the president.
What is a DNU
The Urgent Necessity Decree or DNU is a tool established in Argentina that allows the head of state to intervene in the legislative branch for urgent issues that cannot be delayed and go through the usual legislative process. Milei already signed a DNU on December 10 to reduce his cabinet. Congress can reject it by a majority of both chambers, but it can also modify it. The approval of one of the two chambers is enough for the DNU to be valid. It comes into force at the time of issuance and is valid until it is rejected by one of the chambers.
In a recorded message, Milei said before the cameras that he and his Executive are making the “maximum effort to try to reduce the tragic effects of what may be the worst crisis in our history.” And then he remembered that everything is the politicians’ fault as if he were not: “Politicians are not only not God, but they are the cause of our problems.”
“Politicians are not only not God, but they are the cause of our problems.”
The president of Argentina assured that this DNU is only the first step. “In the coming days we will call extraordinary sessions of the National Congress and send a package of laws asking Congress for collaboration to advance this process of change that society chose in a context of crisis that requires immediate action.”
Milei read the 30 points included in the Decree of Necessity and Urgency in the 366 articles published on 83 pages of the Official Gazette. Are these:
Repeal of the Rental Law: so that the real estate market functions again without problems and that renting is not an odyssey. Repeal of the Supply Law, so that the State never again attacks the property rights of individuals. Repeal of the Gondolas Law so that the State stops interfering in the decisions of Argentine merchants. Repeal of the National Buy Law that only benefits certain actors in power. Repeal of the Price Observatory of the Ministry of Economy to avoid the persecution of companies. Repeal of the Industrial Promotion Law. Repeal of the Trade Promotion Law. Repeal of the regulations that prevent the privatization of public companies. Repeal of the State Companies regime. Transformation of all State companies into public limited companies to its subsequent privatization.Modernization of the labor regime to facilitate the process of generating genuine employment.Reform of the Customs Code to facilitate international trade.Repeal of the Land Law to promote investments.Modification of the Fire Management Law.Repeal of the obligations that sugar mills have in terms of sugar production. Liberation of the legal regime applicable to the wine sector. Repeal of the national mining trade system and the Mining Information Bank. Authorization for the transfer of the total or partial share package of Aerolíneas Argentinas. Implementation of the open skies policy. Modification of the Civil and Commercial Code to reinforce the principle of contractual freedom between the parties. Modification of the Civil and Commercial Code to guarantee that obligations contracted in foreign currency must be paid in the agreed currency. Modification to the regulatory framework of prepaid medicine and social works.Elimination of price restrictions on the prepaid industry.Incorporation of prepaid medicine companies into the social works regime.Establishment of electronic prescription to streamline the service and minimize costs.Modifications to the regime of pharmaceutical companies to promote competition and reduce costs. Modification of the Companies Law so that football clubs can become public limited companies if they so wish. Deregulation of satellite internet services. Deregulation of the tourism sector by eliminating the monopoly of tourism agencies. Incorporation of digital tools for automotive registration procedures.
The consequences of this macrodecree are enormous quantitatively and qualitatively.
Labour reform
Milei has ordered a labor reform with more than 40 changes that make laws such as the Employment Contract more flexible. One of the main modifications is the reduction of compensation by varying the calculation base without supplements, bonuses or food vouchers, despite the fact that they were recognized in several rulings.
The trial period of a contract is extended from 3 to 8 months, so any employee may be dismissed without the right to compensation in that period of time. All fines established by law that the employer must pay to the affected worker for lack of registration of the employment relationship or irregular registration of it are eliminated.
More essential services, fewer strikes
Designating a service as essential implies that its interruption or impact could have serious consequences for the community. And Milei’s DNU makes education an essential service at all levels. Therefore, when providing minimum services, in no case may they have coverage of less than 75%.
Other services that are considered essential are: health and hospital services; transportation and distribution of medicines; the production, transportation, distribution and marketing of drinking water, gas and other fuels and electrical energy; telecommunications services, including internet; commercial aeronautics and air and port traffic control; and customs and immigration services, linked to foreign trade.
Rentals in freedom and without control
The DNU repeals the Rental Law (which came into force in October) so that, according to Milei, “the real estate market works smoothly again and renting is not an odyssey.” This paves the way for owners to set the conditions of contracts without adhering to any State limits beyond the Civil and Commercial Code.
The current law stipulated minimum contracts of three years and updated semiannually. Now they will be for two years, they can be signed in dollars and adjustments can be agreed between the parties.
Public companies towards privatization
Article 48 of the DNU says that all companies or companies with State participation, “whatever type or corporate form adopted, will be transformed into public limited companies.” Milei said that the next step would be its privatization. Currently, the Argentine Government has 51% of YPF and total control of 33 state companies.
The opposition begins in the streets
After reading the 30 measures, Milei concluded: “If we move forward on this path, we do so with determination and forcefulness, I am sure that our country will return to the path of growth and progress that we once knew how to travel.”
But the reaction is already in the streets. Thousands of Argentines gathered this Wednesday in the Plaza de Mayo in Buenos Aires to protest the measures announced by the president. But it is not going to be easy for them: Milei’s reforms also reach social rights. The Minister of Human Capital, Sandra Pettovello, announced this week that any protester who participates in picketing and blocking streets will be deprived of their benefits and social plans.
The Justicialist Party assures that Milei’s DNU “is null and unconstitutional, it overwhelms the institutions of democracy, destroys SMEs and surrenders national sovereignty.” According to the formation of former president Alberto Fernández, with the 30 measures, Milei “decreed more anguish, poverty and unemployment for Argentina.”
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