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The court in Argentina has put a temporary stop to Milei's proposed changes to labor laws.
Americas Economy

The court in Argentina has put a temporary stop to Milei’s proposed changes to labor laws.

On Wednesday, judges in Argentina halted alterations to labor laws that were included in a decree issued by the new president, Javier Milei, which aimed to implement significant economic reforms and deregulation with a libertarian approach.

The CGT labor union contested the modifications, which were officially implemented last Friday, arguing that they undermine fundamental employee safeguards, such as the ability to strike and take parental leave.

The labor appeals court in Argentina has halted certain parts of Milei’s decree. This includes extending the probationary period for new employees from three to eight months, decreasing compensation for termination, and shortening maternity leave.

Judge Alejandro Sudera raised concerns about the “need” and “urgency” of the decree signed by Milei on December 20, shortly after assuming office. As a result, the measures have been put on hold until they can be further examined by Congress.

According to a statement released to the press by Sudera, certain actions that were outlined seemed to have a controlling or punishing intent. It is uncertain how these actions would contribute to Milei’s goal of generating genuine employment opportunities.

The ruling from Wednesday can be appealed by the government.

Last week, a large number of people gathered on the streets to demonstrate against the changes proposed by self-proclaimed “anarcho-capitalist” Milei. He was elected in November with the pledge to drastically reduce government spending, as Argentina struggles with an economic downturn that has resulted in inflation rates reaching triple digits.

The CGT has declared a nationwide work stoppage on January 24.

“Rebuilding the country”

FILE - Argentine President Javier Milei attends a Hanukkah celebration in Buenos Aires, Dec. 12, 2023. Milei has said that the goal of his sweeping economic decree was to "start along the path to rebuilding the country."

In December 12, 2023, Argentine President Javier Milei participated in a Hanukkah event in Buenos Aires. He stated that his comprehensive economic decree aimed to initiate the process of reconstructing the nation.

The legality of the measures has sparked intense discussion among legal experts and is currently being contested in multiple court cases.

Milei stated that his decree aimed to initiate the process of reconstructing the nation and eliminating the numerous regulations that have hindered economic progress.

The ruling modified or eliminated over 350 financial rules in a nation used to significant government involvement in the economy.

The law overseeing rent will be removed, state-owned enterprises will be privatized, and approximately 7,000 civil service contracts will be ended.

Argentina, the third largest economy in Latin America, is experiencing severe economic struggles due to long-standing debt and poor financial management. Inflation has reached over 160% annually and 40% of the population is living in poverty.

Milei has promised to reduce inflation, but cautioned that the only solution is to implement drastic measures, and that the situation will likely worsen before it improves.

Won election resoundingly

The 53-year-old achieved a decisive win in the election, fueled by anger towards the country’s long-standing economic struggles characterized by debt, excessive money printing, inflation, and fiscal deficit.

Milei’s goal is to reduce spending by 5% of the gross domestic product.

Not long after assuming office, his government decreased the value of Argentina’s currency, the peso, by over 50% and revealed significant reductions in the substantial government subsidies for fuel and transportation.

Milei has declared a pause on any new public construction endeavors and a one-year postponement of state advertising.

The people of Argentina still fear the extreme inflation rates of up to 3,000% that occurred in 1989 and 1990, as well as the sudden economic collapse of 2001.