December 13, 2017
Monday, August 25, 2014

Congress tackles debt swap, Anti-Hoarding

Pension moratorium is expected to be passed as law this week by Lower House

A key economic week begins in Congress today as lawmakers get ready to tackle a set of economic measures submitted by the federal government, including a proposed new debt swap, the reform of the Anti-Hoarding Law and a moratorium for pensions.

The economy-centred week will end Friday, with a meeting of the Minimum Wage Council that will come a day after opposition unions carry out a planned a national strike.

On Wednesday, the Senate’s National Economy, Foreign Relations and Budget and Finance committees will begin discussing President Cristina Fernández de Kirchner’s plan to bring the jurisdiction of the country’s international debt to Buenos Aires, so as to prevent further interference from US courts in debt payments.

The bill also proposes the removal the Bank of New York Mellon as the government’s trustee, and the establishment of Nación Fideicomisos account at the Central Bank as its replacement. If passed, the government will also deposit cash for holdout hedge funds as if they had accepted the 2005 and 2010 debt swaps.

Renewal Front leader Sergio Massa said he will be submitting a bill of his own to Congress, modifying certain articles of President Cristina Fernández de Kirchner’s bill.

The Radical party (UCR) and PRO have already confirmed they will be voting against the bill. Other opposition Peronists, such as Córdoba Governor José Manuel de la Sota, have supported the jurisdiction change.

Although the lion’s share of the opposition in the Senate and the Lower House has announced its rejection of the government’s initiative, the bill is still expected to sail through legislative hurdles on account of the ruling Victory Front’s (FpV) numerical majority and the party’s cohesion on the issue.

Hoarding prevention

With the controversial proposed amendments to the Anti-Hoarding Law, the government is seeking permission to take a more active role in private companies that could eventually allow it to determine prices, profit margins and production volumes. The state would thus be able to manage company sales and to seize goods and documentation.

The bill will likely be cleared for debate on the floor by the chamber’s Constitutional Affairs, Rights and Guarantees, Justice and Penal Affairs and Budget and Finance committees tomorrow after a plenary session, scheduled for 11am.

Two complementary bills accompany the Anti-Hoarding reform: one for the establishment of a Prices and Availability of Materials, Goods and Services Observatory and another for the creation of a judicial forum to resolve conflicts in the retail sector, where consumers would be able file complaints and receive free legal aid. If an agreement isn’t reached with the business, consumers will be allowed to ask the Trade Secretariat for a quick solution to obtain compensation or seek redress in a national court.

The Chamber of Commerce (CAC) and UIA industrial chamber and most of the opposition have slammed the reform as a replica of the Fair Prices Law that led Venezuela to food shortages, arguing the measure will reduce businesses’ willingness to invest.

President Cristina Fernández de Kirchner has said consumer associations and business chambers will be allowed to take part in the debate and propose changes.

New pensioners

In the Lower House, legislators are expected to turn into law the bill to give approximately half a million people above the retirement age who did not make all of their contributions — many as result of high unemployment during the 1990s — access to pensions. The scheme involves a contribution debt repayment plan of five years, and Economy Minister Axel Kicillof said the measure will cost the government 12 billion pesos.

Herald with DyN, Télam

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