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ECONOMY | 09-05-2024 10:40

Milei faces second major strike as Argentina resists austerity

Argentines woke up Thursday to the country’s second national transport strike since President Javier Milei took office in December.

Argentines woke up Thursday to the country’s second national transport strike since President Javier Milei took office in December, ratcheting up pressure on his government as it faces its biggest test yet in Congress.

Trains, subways and several bus lines won’t operate for 24 hours, bringing the Buenos Aires metro area to a standstill. About 93,000 passengers with flights will be affected as well, local TV station TN reported.

No president in recent Argentine history has faced two strikes of such scale so early into a term — a sign of the public pushback against Milei, who is enjoying a wave of praise abroad from the likes of Elon Musk and Stanley Druckenmiller. 

The stakes are higher this time compared to the first strike in January as Milei has changed his legislative strategy to incorporate compromises with moderate political blocs instead of his initial approach of pushing reforms via decree, going around the political class he often lambastes. 

His most important piece of legislation filled with pro-business measures is headed for a vote in the Senate this month after it passed through the lower house Chamber of Deputies in April. In particular, the country’s powerful unions are resisting Milei’s bid to pass reforms that would lower companies’ severance costs and empower his austerity campaign even further. 

Investors are carefully watching Milei’s progress in congress as a barometer of his ability to enact a market-friendly agenda that paves the way for Argentina to eventually return to international capital markets. The country hasn’t issued new debt abroad since the previous government defaulted in 2020. 

Thursday’s strike comes in the wake of Argentina’s deepening recession as a result of Milei’s policies, such as a 54-percent currency devaluation in December and major government spending cuts. Manufacturing and construction posted some of their sharpest declines in March since the Covid-19 pandemic as employers in both sectors expect to reduce headcount, official data published Wednesday showed. 

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by Patrick Gillespie, Bloomberg

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