20171220-法国巴黎银行-Argentina__First_steps_on_rocky_reform_road_6页_228kb

Argentina: First Steps on Rocky Reform Road

Core Content Overview

This document outlines the current status and implications of various reform initiatives in Argentina, with a focus on the pension reform and its political and economic consequences. It also provides details on the legislative agenda and the regulatory framework under which the report is issued.

Key Reforms and Their Status

Pension Reform

• Approval and Impact: The pension reform, which changes the formula for pension adjustments, was finally approved on 19 December. It gives 70% weight to consumer prices and 30% to wages.
• Economic Savings: The reform is expected to save slightly less than 0.5% of GDP in 2018.
• Political Cost: The reform was politically costly for the ruling Cambiemos coalition, with a failed attempt to reach a quorum and widespread public demonstrations.
• Minimum Retirement Age: The province of Buenos Aires has raised the minimum retirement age for specific workers.
• Timing of Further Reforms: Due to the lack of a congressional majority and public discontent, further substantial changes like increasing the minimum retirement age are likely to be postponed until after the 2019 presidential election.

Tax Reform

• Approval Status: The tax reform was approved by the lower chamber with a margin of 146 to 77.
• Senate Approval: Senate approval is expected next week.

Fiscal Responsibility Agreements

• Status: The fiscal responsibility agreement with provincial governors is likely to be voted on this week in the lower chamber and approved in the senate.

Budget Law

• Status: The 2018 budget law is also likely to be voted on this week in the lower chamber and next week in the senate.

Labour and Capital Markets Reform

• Labour Reform: The debate on the labour reform has been postponed to Q1 2018. It is considered potentially controversial and may trigger social tension.
• Capital Markets Law: The capital markets law was approved in the lower chamber but postponed to 2018 in the senate. This is seen as a minor setback for Cambiemos.

Legislative Agenda Summary

Regulatory and Legal Notice

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Main Points and Views

• The pension reform was a major political challenge and is expected to be the first step in a long-term effort to make the pension system sustainable.
• Other reforms, such as tax and fiscal pacts, are likely to be approved without major concessions.
• Labour and capital markets reforms are expected to be delayed due to their potential to cause social unrest and political opposition.
• The government is likely to wait until after the 2019 presidential election to introduce more significant reforms.