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YPF to Stay in Public Hands, Emergency Powers Limited – Buenos Aires Herald

Milei’s ruling coalition agrees to over 100 modifications in a bid to push a massive state reform bill through Congress (Buenos Aires Herald)

Facundo Iglesia, Buenos Aires Herald

EnergiesNet.com 01 22 2024

Senior members of Javier Milei’s government have agreed to over 100 changes to his omnibus bill as his La Libertad Avanza coalition negotiates for the support it needs to get the bill approved in Congress. Among the most important changes, state oil and gas company YPF will not be privatized, the scope and duration of the state of emergency that allows the president to skip Congress will be reduced, and the executive will have limited ability to increase export duties.

Ruling coalition La Libertad Avanza (LLA)wrote an 8-page list of modifications to over 100 of the bill’s 664 articles. It came after days of intense negotiations with parties that are receptive to parts of Milei’s agenda and could deliver the majority he needs for the bill to be approved in congress. Interior Minister Guillermo Francos, presidential advisor Santiago Caputo, and head of the Lower House Martín Menem acted as LLA’s negotiators.

LLA will write a new version of the bill in the coming days and, if parties indicate that they plan to back it, it will proceed to a congressional debate, Congress sources told the Herald. On Friday, Milei announced that extraordinary sessions, which were scheduled to last until January 31, will be extended until February 15.With commission discussions closed, the final countdown for LLA to gain the necessary support to approve the bill has begun. It needs 129 votes — a simple majority of the 257 deputies — to pass the Lower House. LLA is the only coalition that has confirmed it will back the bill, and it has only 38 deputies.

Every ministry participated in the discussions, a spokesperson for the Economy Ministry said. 

The original bill aimed to declare a state of public emergency regarding “economic, financial, fiscal, social security, security, defense, tariff, energy, sanitary, administrative, and social” matters. This state would last for two years and the government could extend it to four. It would allow Milei to legislate on those matters without having to go through Congress. The modified version would eliminate the “defense, social and sanitary” emergencies and reduce the period to one year, which the Executive Branch can extend to two.

The bill also declared 41 state-owned companies “subject to privatization,” the first step before the government can sell them. The new version takes YPF off the list and guarantees state shares in Nucleoeléctrica Argentina, the state company dealing with the country’s nuclear power plants, in the event that it is privatized. The draft doesn’t mention the other 39 companies the bill aims to privatize — including the Banco Nación bank, the national airline Aerolíneas Argentinas, and Télam news agency.

The new bill would also eliminate export duties on so-called regional economies, which in Argentina include producers of traditional local products such as lentils, yerba mate, sugar, and honey. The fishing chapter, which was controversial among Patagonian governors, will also reduce some of its proposed changes — namely, it will maintain the requirement for fishing boats in Argentine seas to offload in Argentine ports. As Security Minister Patricia Bullrich announced last week, the government will not demand permits for three-person meetings in public areas. 

In the original project, the government would have been allowed to dismantle the Sustainability Guarantee Fund (FGS), a sovereign investment fund that partly finances social benefits in Argentina, including pensions. The Economy Ministry hoped this would wipe out almost 10% of the country’s public debt and secure US$5.6 billion in shares of different companies in the FGS. The new text states that the government will need the approval of a Congress commission before it can do this.

Alejandro Cacace, the Parliamentary Secretary of the centrist party UCR, which participated in the meetings through its deputy Rodrigo De Loredo, told the Herald that the government had addressed all the points his party raised, including export duties, delegation of congressional powers, and privatizations. However, he said that the party still has to see the final draft and that some points were not entirely resolved.

The formula that the government uses to update pension payments, which the original project eliminated, was not addressed in the new version, Cacace noted. He added that they will insist that Milei’s congressional powers can only be extended by Congress, and not by Milei himself, as is the case in both versions of the omnibus bill.

He also demanded more information on how privatizing state-owned companies would work and the export duties that weren’t eliminated in the new version.

“There have been positive changes, but there is still work to be done,” he said.

buenosairesherald.com 01 19 2024

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