Argentine Congress tries at pension reform again ahead of strike

Reuters News
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Posted: Dec 18, 2017 10:51 AM

BUENOS AIRES (Reuters) - Argentina's Congress could pass a hotly debated pension reform measure on Monday, lawmakers told reporters, as demonstrators gathered in the capital and the country's main union called a 24-hour general strike to protest the proposal.

Debate on the bill was suspended on Thursday amid violent protests, which were put down by police firing rubber bullets and tear gas. On Friday the government amended the proposal to include a bonus payment to the most needy retirees.

"It will be a one-time bonus payment made in March," opposition lawmaker Agustin Rossi told reporters.

Union leaders and opposition activists say the legislation will hurt pensioners. Protesters gathered around the congressional complex early Monday afternoon ahead of the lawmakers' debate on the proposal.

The day-long strike called by Argentina's main CGT labor group started at noon local time (1500 GMT). It was not expected to affect the nation's transportation system until late Monday night, allowing workers to get home in the afternoon.

The bill, key to President Mauricio Macri's efforts to lower business costs and reduce Argentina's fiscal deficit, has already passed the Senate, leaving the lower House to give final legislative approval.

Macri is aiming to cut the fiscal deficit to 3.2 percent of gross domestic product next year from 4.2 percent this year, and reduce inflation to between 8 percent and 12 percent from more than 20 percent this year.

The pension bill would change the formula used to calculate benefits. Payments would adjust every quarter based on inflation, rather than the current system of twice-yearly adjustments linked to wage hikes and tax revenue.

Economists say the current formula means benefits go up in line with past inflation. Left unchanged, that could harm Macri's efforts to cut the deficit.

Under the new formula, benefits would increase by 5 percentage points above inflation, according to cabinet chief Marcos Pena. The plan would take effect at a time of lower inflation expectations and would slow the pace of pension benefit increases.

(Reporting by Hugh Bronstein; Editing by Jeffrey Benkoe)