An Argentina court dealt a decisive blow to President Javier Milei's economic reform agenda on Tuesday, AP reports.

The three-judge panel overturned proposed labor rules that aimed to simplify the process of employee termination, declaring them unconstitutional.

The ruling emphasized that Javier Milei's government exceeded its authority by implementing the regulations without congressional approval, asserting that such significant changes must first undergo scrutiny and endorsement by the legislative body.

This legal setback adds a layer of complexity to Argentina president's broader efforts to reshape regulations, which he contends have stifled Argentina's struggling economy.

The decision follows the court's earlier temporary suspension of the regulations in January, initiated in response to a legal challenge from the General Labor Confederation, the main union group.

The latest ruling provides an opportunity for appeal before the Supreme Court, leaving the fate of Milei's labor reforms hanging in the balance.

As of now, Javier Milei's administration has not indicated whether it intends to contest the decision.

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Argentina Mega Reform Bill Faces Congressional Scrutiny

President Javier Milei's administration expressed confidence on Tuesday that its comprehensive Argentina mega reform bill, known as the "omnibus bill," would secure approval in Congress, according to Reuters.

The bill plays a central role in Milei's strategy to revitalize Argentina's struggling economy, burdened by high debt, soaring inflation, and stringent capital controls.

The proposed legislation has undergone modifications to address divisive sections, with presidential spokesman Manuel Adorni anticipating swift approval.

Milei, who assumed office in December, embarked on a mission to reduce the size of the state and implement austerity measures to stabilize the nation's finances.

Despite garnering support from markets, investors, and the International Monetary Fund (IMF), Milei acknowledges the challenges ahead, forecasting a potential economic contraction this year.

The omnibus bill, a crucial element of Milei's reform plan, is set for debate in the lower house of Congress, having undergone revisions to accommodate opposition concerns.

Evolution of the "Ley de Bases y Puntos de Partida para la Libertad de los Argentinos"

Originally comprising 664 articles, the initial version of the bill faced limited support in Congress.

The revised bill, now with fewer than 400 articles, maintains provisions allowing the privatization of public companies while excluding state oil driller and refiner YPF SA, as per Buenos Aires Times.

Emergency executive powers to eliminate energy and transport subsidies are among the retained measures.

With a minority presence in both houses of Congress, Milei relies on the support of the right-wing PRO party and moderate members of other political groups to advance his Argentina mega reform bill.

The government, engaged in dialogues with opposition factions, requires backing from at least 129 lawmakers to proceed with the bill.

Opposition resistance, particularly from provincial governors, prompted concessions on fiscal matters, such as shelving the proposed increase in agricultural export duties.

The revised bill preserves the social security indexation formula, avoids changes to the personal income tax base, and retains state control over certain entities, including Nucleoeléctrica Argentina, Banco Nación, and Arsat, albeit with private stakeholders.

The government's willingness to compromise extends to the CONCIET state scientific research institute, which will not be dissolved.

However, critics, including the Peronist faction, remain skeptical of the government's pursuit of extra powers, criticizing the removal of the fiscal portion and highlighting concerns over delegated powers, debt flexibility, and privatizations.

Amid political maneuvering, all eyes are on the latest version of the bill and the extent of delegated powers it proposes.

While lawmakers advocating dialogue seek reductions in Milei's demands, Peronist critics condemn what they perceive as an attempt to amass additional powers without balanced negotiations.

As Argentina navigates this critical juncture, the fate of Javier Milei's economic reforms hangs in the balance, with the Supreme Court potentially becoming the final arbiter of this contentious legal and political saga.

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This article is owned by Latin Post.

Written by: Bert Hoover

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