Milei, who will spend the weekend after the negotiations every minute, knows that she cannot do without any of her potential allies. The UCR and HCF are enough to open the venue, but the Federal Innovation is the key for two reasons: it allows the ruling party to cover itself from possible fragmentations that may exist in the other two blocs, and, in addition, the heads of the provincial parties hold the key to the quorum of the Senate.
In the proposal he presented on Thursday, Milei offered not to increase restrictions on 35 activities in regional economies (which increased to 15%), and in the selection, he removed many areas where local parties have votes in Congress. For example, the provincial legislator Carlos Rovira, the political leader of Misiones, met with his representatives on Friday to ask them to reject the higher financial costs of wood and tobacco exports.
References from the provinces of the humid pampas, such as Córdoba and Santa Fe, did not want to vote for the increase in restrictions on soy products (it increased from 31 to 33%) and other grains, which is also set at 15%.
This is another debate that broke down after the Franco-Caputo meetings on dialogue blocs. In the draft, the officials offered to remove YPF from the list of 41 tradable public companies and guarantee the share of gold to the State of Nucleoelectrica.
The opposition demanded a commitment to maintain other public companies, such as Banco Nación and Yacimientos Mineros de Agua de Dionisio (Ymad), but Milei did not agree. Another claim is that in order to sell the shares, a binding opinion is required from the bicameral committee on the modernization of the state and control of privatizations. The President proposed a procedure for this commission to act, but without veto power.
Potential allies of the government believe that this is a closed matter, although no official voice has yet confirmed this. The UCR, HCF, IF, and PRO request that if the project article removing the current movement formula is approved, it will be replaced by another that takes into account the monthly change in the Consumer Price Index (CPI).
In the meeting between Caputo and Francos, the opposition did not receive an alternative text, but they received a promise to resolve the issue with one of the two proposed variants. As a minority, the government does not have many alternatives: send a new formula or stay with the current one.
This is an important issue for Milei to address. According to a report from the Congressional Budget Office (CPO), if only the minimum pensions were indexed this year, the Libertarian administration would save one point of GDP.
An opposition leader explained in Letter P that Milei encountered another problem that she would not mention. Because the current formula has a delay of one year, if inflation is controlled as proposed, it will be very expensive to pay the pension in the last semester.
Credit without limits
In this issue, the opposition in the dialogue can be divided and allow the government a victory in the particular vote of the project, which is when each article is considered. The UCR did not agree to allow the government to borrow dollars without limits, which the project requested by eliminating articles 1 of the sustainability law (authorized in 2021) and 65 of the financial administration law, which state the limit on renegotiation of foreign currency debts. The Minister of Economy, Toto Caputo, called for future profiling to be defined according to “prevailing circumstances.” He will find another word to satisfy the HCF, IF, and PRO. He didn’t think about UCR.
If there is a missing issue that can weaken the negotiations, there are governors who demand that some of the tax reforms in the project lead to the flow of funds to their ailing coffers.
The provinces do not have any benefit from the omnibus law because Milei proposes to adjust the reduction in pension spending and increase the restrictions on exports, which are not shared. In addition, the project reduces the burden on personal assets, a part of which is distributed among 24 jurisdictions.
This week, non-Peronist leaders sent signals to their lawmakers to consider their homeland before voting. Francos tried to calm them down and one of the proposals he brought to Congress was to exclude the reduction of Personal Assets from the final version and include it in the promised bill to reduce the minimum non-taxable income tax, which result in a strong increase in the automatic transfer of provinces. The governors would like to see this proposal in writing.
This is an issue where there is no clear consensus, perhaps because Milei will not fully accept her defeat. In the draft that he brought to the opposition, the President proposed to lower the term of the delegated powers proposed in the project from four to two years, the second extension of the Executive Branch. In addition, the subject members were reduced from 11 to eight, along with the elimination of defense, health, and social members.
The opposition in the dialogue demanded that the emergency be restricted to one year and the second be for the consideration of Congress. He won’t vote for anyone else. Milei, for now, refuses to trust parliament with every decision he makes in 2025. He has to accept it.
Elimination of FGS
This is a problem that has gained momentum this week and the Government did not expect it. Milei knows that Kirchnerism will refuse to vote to liquidate the Anses Sustainability Guarantee Fund, but he does not think that there will be no consensus in the dialogues.
In the UCR there is a group that defends the FGS as a countercyclical instrument, while in the HCF and KON they request that, if their shares and public securities are sold, a flow of money will guarantee the continuation of the aid provided of the Nation to 13 pension funds from the provinces that are lacking.
The Government has suggested that the sale of FGS requires a favorable opinion from the bicameral committee that monitors privatization. Without the opposition in the dialogue, I would never have it.
Milei did not accept the proposal of the dialogues to eliminate non-economic chapters from the project and discuss them at the beginning of ordinary sessions. The opinion prepared by the opposition eliminates changes in the environment, culture, education, tourism, reform of the Civil Code and the inclusion of impeachment, among others. The President took suggestions from his allies on these issues, but did not want to postpone them.
Political reform is in limbo: so far, Milei has only ruled out voting on the new composition of the Chamber of Deputies, but he has not ruled out continuing the debate on electing members of that chamber through the single-member constituency system. , although It was rejected by all the opposition. The idea of abolishing PASO still remains: a proposal from the representative is being studied Maria Eugenia Vidal so that they are not mandatory and the State does not spend on them.