Argentina’s Javier Milei unveils sweeping decree to deregulate the economy

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Argentina’s libertarian president Javier Milei unveiled a sweeping emergency decree on Wednesday night to rapidly deregulate the country’s economy, sparking protests and setting the stage for a defining political battle.

The decree included 300 measures, striking down major regulations covering Argentina’s housing rental market, export customs arrangements, land ownership, food retailers and more. It also modifies rules for the airline, healthcare, pharmaceuticals and tourism sectors to encourage competition.

Employee severance packages will be cut and the trial period for new employees extended, while companies will no longer pay fines for failing to register workers.

The new rules, which enter into force on December 29, also change the legal statuses of the country’s state-owned companies, which include an airline, media companies and energy group YPF, allowing them to be privatised.

“Today we are taking our first step to end Argentina’s model of decline,” Milei said in a pre-recorded broadcast. “I have signed an emergency decree to start to unpick the oppressive institutional and legal framework that has destroyed our country.”

The decree marks the realisation of Milei’s campaign promise of a sharp break with the extensive regulations, high taxes and sprawling public sector introduced by the left-leaning Peronist movement over the past two decades. Its implementation, however, will pit the libertarian against Peronists in congress and their allies in Argentina’s powerful labour unions.

“Ignoring the division of powers he announces a decree that, with neither urgency nor necessity, strikes down all kinds of laws,” said Axel Kicillof, the powerful Peronist governor of Buenos Aires province. “It proposes privatising everything, deregulating everything, destroying the rights of workers and wiping out entire production sectors.” 

After the broadcast, residents of Buenos Aires banged pots and pans on their balconies and in public squares in protest. Thousands attended an impromptu rally outside Argentina’s congress building, shouting: “Our country isn’t for sale!”

Opposition politicians accused the president of issuing the new mandates via decree in order to bypass votes on them in congress, where his La Libertad Avanza coalition holds just 15 per cent of seats in the lower house and less than 10 per cent of the senate.

Under Argentina’s constitution, presidents can issue “decrees of urgency and necessity” on most areas of policy — except tax, penal and electoral matters and rules for political parties — when “exceptional circumstances make it impossible to follow ordinary procedures”. Decrees stay in place until both houses of congress vote to strike them down.

Margarita Stolbizer, a legislator for the non-Peronist centre-left party Gen, said the decree was “abusive and unconstitutional”. “The legislature will have to analyse every part of this deeply,” she added.

Analysts said the unprecedented breadth of the presidential decree made it hard to predict whether the measures could be implemented.

Eugenia Mitchelstein, associate professor at Buenos Aires’ University of San Andrés, said the decree may be a “starting shot” of a battle with congress, with the government potentially sending a series of bills to congress to legislate parts of the package.

“The strategy may be to throw as much as possible at the wall to get some of it to stick,” she said.

Among the most controversial measures for legislators would be the relaxation of labour and healthcare regulations, she said.

Milei has claimed that the 56 per cent vote share he secured in November’s election gave him a mandate for drastic reforms to Argentina’s economy.

Public reaction to the decree, particularly among moderate voters, would be vital to his ability to win over congress and implement his reforms, said Cristian Buttié, director of public opinion company CB Consultora

“The public’s [tolerance] for this bold manoeuvre will depend greatly on whether Milei starts to deliver economic results,” he said. “That is the oxygen Milei needs in order to keep advancing.”