After a marathonic session in the Chamber of Deputies, and hours after a day of extreme violence outside the Congress, the ruling party managed to approve this morning the pension reform with 127 votes in favor, 117 against and two abstentions.
The lower house approved the law of the reform of the formula for the update of pensions at the close after twelve hours of open debate, tantrums and unsuccessful calls by the opposition to lift the session as last Thursday. The Government wants to save some 60 billion pesos in 2018 with this rule.
The government allied with the approval of the reform after a day with incidents and clashes between protesters and security forces, which ended with 162 injured, including 88 police officers, and 61 detainees. Last night there were cacerolazos in different neighborhoods of the Capital and a crowd was concentrated at Congreso’s square.
The project establishes a new formula for calculating the update of pensions. Unlike the current one, which mainly considers the evolution of salaries and the collection of tax revenues received by ANSES (Argentine government social insurance agency), the new one is composed in a ratio of 70/30 by the variation of prices (inflation) and the average of wages from workers in dependency relationship.
The new formula, which would be applied every three months, does not include inflation in the last quarter of this year. Therefore, after a meeting with the governors last Friday, the Government promised to grant a compensating bond in March that, according to sources, would reach 10 million retirees and beneficiaries of the universal allocation per child.
The savings of 60,000 million pesos per year is vital for the Argentine Government since it will be the base for the planned tax code overhaul and the fiscal consensus signed with the governors last November. Those reforms still await the approval of the lower house.