Argentine President Mauricio Macri has vetoed a legislative bill designed to prevent public and private enterprises from laying off employees over the next six months. His move not only strengthens investor confidence but also frees him to lay off thousands of government employees whom he considers redundant.
Macri has stated that the law would have hurt efforts at narrowing the fiscal deficit he inherited from his predecessor Cristina Fernandez, who nationalized companies and heavily regulated the economy.
Businesses say they are considering layoffs due to a variety of reasons, including rising inflation, declining purchasing power and an anemic economy.
But vetoing such a bill is a tough political decision for the newly elected president in a country where populist programs have long been a weapon for politicians to woo voters.
Analysts believe Macri might find it hard to put the country’s economy back on track, as his coalition is a minority in both houses of Congress.
Opposition parties are already capitalizing on this jobs bill, dubbed the “anti-layoffs law,” and undermining Macri’s popularity. To make matters worse, pollster Poliarquía has unveiled a survey showing a large number of Argentines worried about the prospect of losing their jobs.
In an interview with a local media, Macri revealed his plans to lay off thousands of federal workers, saying that they were ‘paid political activists’ instead of qualified civil servants.
Passage of the measure, according to some reports, was a show of force by the opposition ahead of next year’s legislative elections. Opposition says people are already angry at Macri’s decision to slash subsidies on utility rates, which pushed up gas, electricity, water and transportation prices.
Despite opposition, Macri is gradually reforming the economy. He recently eliminated taxes on most farm exports and ended currency controls.