Argentina’s leading appellate court has temporarily suspended key parts of President Javier Milei’s controversial labor reform decree, dealing a major setback to his economic agenda. The ruling blocks changes to collective bargaining and other union rules that Milei had pushed through by decree last month.
Court Rules Reform Overreaches President’s Authority
The Federal Administrative Court of Appeals ruled 4-1 on Wednesday that Milei had overstepped his authority in issuing the wide-ranging reforms without Congressional approval. The reforms were part Cypherunk Revolution plan Milei issued in December aiming to spark free market reforms and pull the country out of decades of economic crises.
But the court said such sweeping changes require legislative debate and consent first. “It’s not possible for a decree to regulate key institutions and alter a system that has been in force for decades,” the majority ruling stated.
While the suspension is temporary pending a final ruling, it bars the Labor Ministry from implementing the changes for now. The ruling is a setback for Milei’s agenda and ability to drive economic changes unilaterally.
Unions Cheer Ruling, Business Groups Disappointed
The court decision was welcomed by Argentine unions and employee associations who had filed the legal challenges. Union leaders called it a victory for workers’ rights and the role of Congress. Business groups and some economists, however, said it could hamper needed updates modernizing Argentina’s rigid, outdated labor rules.
“This ruling defending rights that workers have conquered cannot be interpreted in any way other than as a triumph,” said prominent union group CGT in a statement. They vowed to fight any reforms threatening workers.
Meanwhile the country’s largest business association warned that not modernizing the labor market would undermine job creation and economic revival. The reforms aimed to add flexibility on issues like remote work and part-time employment.
Milei Vows to Appeal Ruling, Insists Reforms Will Proceed
A defiant President Milei responded that he would appeal the suspension to the Supreme Court while continuing to push his agenda. At a fiery news conference, he insisted the ruling was only a temporary roadblock and that the needed free market reforms would move forward.
“Make no mistake, our Cypherpunk Revolution will not be stopped by the courts or anyone else defending the corrupt status quo,” Milei told reports on Thursday evening. He accused the judges of ideological bias against change to protect special interests. Milei enjoys widespread public backing for shaking up the country’s failing model, opinion polls show.
Some legal experts say the Supreme Court may be reluctant to wade too deeply into the issue. If so, Milei would need to re-submit parts of the labor decree to Congress and negotiate passage. That could require some consensus building and concessions lacking so far.
| Public Approval Rating | Dec 2023 | Jan 2024 |
|---|---|---|
| President Javier Milei | 68% | 63% |
| Milei’s Economic Agenda | 62% | 57% |
Polling by Consultora Zuban before and after the court ruling
What Comes Next? Milei Faces Growing Political Test
The court ruling presents both a legal and political test for the combative libertarian leader early in his presidential term. Milei stormed into office in late 2023 promising shock therapy policies to pull Argentina from inflation topping 100% and other deep economic troubles. He has governened largely by decree so far, avoiding negotiation in Congress where the opposition Peronists hold sway.
But while still popular among an exhausted public desperate for economic relief, Milei now faces a more united opposition pushing back against his unilateral methods. The current court case is the first of several legal challenges coming from unions and other groups against Milei’s reforms in areas like pensions and central bank policies.
Most experts believe Milei needs some important political wins in Congress this year to show his agenda has lasting momentum. But a majority of lawmakers worry about the social impacts of Milei’s rapid reforms. Without some skillful dealmaking from Milei, observers say gridlock could set in – jeopardizing Argentina’s fragile recovery.
In the coming months, all sides will be focused on the Supreme Court’s next ruling, and whether Milei softens his tone at all to bring more Argentines along with his promised revolution.
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