Argentina’s Senate on Thursday rejected by a comfortable majority the broad emergency decree aimed at deregulating the economy, issued in December by President Javier Milei. The so-called mega decree was defeated 42 to 25, with four abstentions, and it will now be sent to the Chamber of Deputies for debate. For the moment, the decree remains in force until Congress acts on it.
The DNU 70/2023, titled “bases for the reconstruction of the Argentine economy,” was signed by Milei on December 21, just days after he took office. Alongside the so-called omnibus bill, this decree sits at the core of Milei’s ambitious reform agenda. It repeals some eighty laws and modifies more than three hundred provisions. The measure is met with strong opposition from a wide swath of political forces, both in Congress where Milei’s party, La Libertad Avanza, holds a third minority, and among provincial governors who are overwhelmingly against it.
The portion of the decree dealing with labor reform was paused by a court at the request of unions, while other aspects were challenged by the province of La Rioja before the Supreme Court. The court has yet to rule on the constitutionality of what is referred to as the mega DNU. Senator José Mayans, a member of the Unión por la Patria bloc, called the decree null and void, arguing it oversteps powers that rightly belong to the Legislature. Senator Ezequiel Atauche, aligned with Milei’s government, defended the DNU, stating that Argentina is in urgency and that politics must demonstrate readiness to change, urging lawmakers to let Milei govern without obstruction.
Following the Senate’s broad rejection, the DNU will be scrutinized in the lower house, where the governing coalition is also likely to encounter hurdles. If the lower house fails to validate the decree, it could be annulled entirely.
Apart from the decree, Milei also sent to the Parliament in December a bill called the Bases and Starting Points Law for the Freedom of Argentines. This package includes wide-ranging measures and a controversial delegation of executive powers that many argue should rest with the Legislature. The plan has faced significant resistance from opposition factions and within the government itself, complicating prospects for parliamentary passage.
With negotiations stalled and divergent views on several aspects of the project, the omnibus strategy effectively stalled in Congress. On March 1, Milei proposed that the governors sign a new “foundational pact” on May 25, outlining around ten points on economics and politics, but only if a new fiscal framework and the omnibus law are approved first. The executive branch has since renewed efforts to push the package forward, albeit with some modifications to address concerns raised during the debate.
Observers note that the political dynamic remains precarious as the administration navigates a charged legislative environment. The Senate’s vote underscores the difficulty of implementing sweeping reforms that aim to reshape Argentina’s regulatory and fiscal landscape. Analysts point to the need for broader consensus if ambitious reforms are to withstand judicial scrutiny and political opposition while delivering tangible outcomes in the economy. The current stalemate highlights ongoing tensions between the executive’s reform agenda and the diverse priorities of deputies, governors, and labor groups, all of whom play a critical role in shaping the policy path ahead.
Meanwhile, proponents argue that the proposed changes are essential to address long-standing economic pressures and to restore investor confidence. They assert that time is of the essence and that decisive action could set the stage for a more favorable macroeconomic environment, despite the risks involved in sweeping changes. Critics warn that rapid deregulation could expose vulnerable sectors and undermine social protections, advocating instead for gradual, carefully calibrated reforms that balance growth with equity. The situation remains fluid as legislative institutions deliberate on the best path forward for Argentina’s economy, governance, and social stability.
As the process unfolds, political leaders and affected groups watch closely to see how the alliance of lawmakers will navigate the next phase. In the meantime, the constitutional questions surrounding the mega DNU persist, with the Supreme Court’s ruling anticipated as a decisive moment that could shape the country’s regulatory framework for years to come. The outcome will likely influence future negotiations and the overall timetable for any comprehensive reform agenda being advanced by the Milei administration.