Milei retreats even further to pass property bill amid backlash

Javier Milei’s government was forced to abandon another section of its private property legislation before it passed, underscoring the Argentine president’s challenges in attracting private investment to the crisis-prone nation.

The bill passed the Senate in a 37-33 vote early Friday morning after a lengthy debate, but not before Milei’s party removed a key section that would have eased land-use restrictions in the aftermath of a fire, intentional or not. The government had already stripped out the bill’s centrepiece Wednesday, which eased limits on foreign property ownership.

Protesters outside Congress railed against the legislation through Thursday evening, clashing with security forces using tear gas, rubber bullets and water cannons to clear the streets. Pop stars, actors and other public figures joined leftist politicians and labor unions accusing the government of trying to sell off Argentina’s land. 

The backlash against the bill is but one factor weighing heavily on Milei’s public image. Some 62 percent of Argentines disapproved of the president in July, up four percentage points from June, compared to 37 percent who regarded him favourably, according to LatAm Pulse, a survey conducted by AtlasIntel for Bloomberg News and published this week. 

Milei’s original bill, introduced in March, eliminated caps on foreign land ownership, from a current limit of 15 percent at the national, provincial and departmental level. A version introduced this week raised the limit to 25 percent before that section was scrapped in response to the uproar.

Surviving parts of the legislation would expedite evictions and ease property recovery after the state takes ownership, an attempt to spur investment after decades of interventionist state policies constrained property values.

“While Milei retains a solid shot at re-election, his approval rates are far from compelling. Even if the manufacturing drag eases somewhat, he’s unlikely to enjoy a smooth path to a second term. Lingering uncertainty should continue to weigh on Argentine assets through the vote," said Jimena Zúñiga, Argentina economist for Bloomberg.

The private property bill was seen by some in the government as a bellwether for an electoral reform that seeks to eliminate, or at least suspend, primaries during the 2027 presidential election. Markets are paying close attention to that reform as it’s expected boost Milei’s chances of re-election and reduce the market volatility that typically shakes Argentina’s economy throughout the prolonged electoral period. The bill will now go to the lower house for another vote.