Argentina’s president defended a pension reform bill approved by Congress in the early hours of Tuesday that has prompted violent protests and a general strike, saying it seeks only to benefit retirees. The measure passed in the lower house by a 127-117 vote after more than 12 hours of debate, much of which came as demonstrators clashed with police outside the chamber.
The legislation, which had already cleared the Senate, would change the formula by which pension benefits are calculated, basing them largely on inflation instead of wage growth and tax contributions. It’s a key part of the economic changes pushed by President Mauricio Macri’s government to reduce Argentina’s high deficit and attract investments.
“We’ve created a formula that defends (retirees) from inflation and guarantees that they will be better,” Macri said at a press conference at the presidential palace. “Our priority is to take care of the retirees.”
But opposition lawmakers, union leaders and other critics complain the bill will cut pension and retirement payments as well as aid for some poor families because consumer prices are expected to be lower.
“We’re sad. This law is bad,” said opposition lawmaker Agustin Rossi. “We tried to impede it from passing, but we couldn’t get the numbers. This harms retirees.”
Argentina’s largest union called a 24-hour general strike that has grounded hundreds of flights. About 150 people were also injured and about 60 were arrested in clashes between police and demonstrators on Monday outside the Congress building. Some retirees who were protesting the measure were caught up in the middle of the violence when some demonstrators hurled rocks and gasoline bombs, and riot police responded with tear gas and rubber bullets.
Macri told reporters that the violence had “clearly been orchestrated” and would be investigated.
In peaceful protests, demonstrators banged on pots in several neighborhoods of the capital Buenos Aires late into the night. The protests hold deep symbolism for Argentines, who have haunting memories of the 2001-2002 economic collapse, when pot-banging marches forced presidents from office and made the country practically ungovernable.
“I respect that there are people who believe that these reforms are not good,” Macri said. “It would be illogical to have unanimity. But I’m asking them not to doubt the intention because I’m convinced that it will help them.”
Since taking office in 2015, the conservative leader has promised to rein in government spending and revive Argentina’s lagging economy. The pension overhaul is expected to save the government about US$3.5 billion.
Macri has been credited with ending a longstanding legal dispute that returned Latin America’s third-largest economy to international credit markets after nearly 15 years. But his ordering of job cuts and slashing of utility subsidies has stoked labor unrest. In October, Macri said that he would seek deeper reforms in tax and labor after his governing coalition notched a decisive victory in midterm congressional elections.
Despite not having the needed majority to have legislation passed, the Macri administration has worked out an alliance with several provincial governors, which are highly dependent on federal government funds. Federal lawmakers from these eight/nine provinces, mostly ruled by the Peronist opposition provided the sufficient support for the bill to be finally approved.