Milei’s first defeat

Less than a month before his inauguration, on December 10th, President Javier Milei faces the first defeat of his administration. The Labor Court decided, this Wednesday (3), to suspend the chapter of the labor reform that is part of the Necessity and Urgency Decree (DNU), equivalent to a Provisional Measure (MP). The decision met the appeal of the General Confederation of Labor (CGT), the largest trade union center in the country and which has Peronist roots and opposes the government of the libertarian Milei. In the DNU, which has more than 340 articles, the labor reform part includes, for example, the extension of the worker’s trial period from three to eight months, changes the current compensation system and provides for dismissal for those who protest at the door of companies.

The CGT, which did not carry out strikes during the government of former president and Peronist Alberto Fernández, despite very high inflation, celebrated the Labor Court’s decision. Behind the scenes, union members stated that “it will not be with satisfaction” that they will carry out the 12-hour strike scheduled for January 24th. But the argument is “defending workers’ rights”, they said. The government, in turn, announced that the decision will be appealed. The dispute could end up being defined by the Supreme Court, according to experts on the subject.

Milei governs with his foot on the accelerator, under the argument, repeated daily by the Presidency spokesman, economist Manuel Ardoni, among others, that Argentina is experiencing an “economic catastrophe” of “biblical proportions”. The legacy left by Kirchnerism is considered “the worst in the history” of the country. Argentine inflation registered around 160% in November in the 12 months and when Fernández was president and Milei’s opposing candidate for the Casa Rosada, Sergio Massa, was the Minister of Economy. But the first measures taken by Milei, who defends the deregulation of the economy and total freedom of the economy, have been fuel for the even more accelerated price markdown. And inflation in December is already expected to be around 30%, with similar increases also in January and February, according to economic consultancies in Buenos Aires.

Milei was elected with around 56% of the vote – the highest vote for a president in Argentina’s 40 years of democracy. But his party, A Liberdade Avança, has a minority presence in the National Congress. Milei will need to negotiate so that the DNU and the so-called Bus bill, with more than 600 articles, are approved. He has already said that if the texts are rejected that he will appeal to a plebiscite – and this has generated a debate about the constitutionality of his claim.

The government has been defined as having little dialogue – with governors, trade unionists, parliamentarians and social movements. Milei suggests that Congress is part of the representation of ‘caste’, as he puts it. Therefore, his inauguration speech was given with his back to parliament, displeasing legislators who remembered, like deputy Miguel Ángel Pichetto, that they were also elected by popular vote.

In government, they seem to make it clear that the political capital they have is that of the ballot boxes. But the question asked here is whether skyrocketing inflation could threaten the government’s deregulation plans and packages. Time will tell.