October 24, 2018 / 4:52 PM / 25 days ago

Argentine lawmakers debate austere 2019 budget amid massive protests

BUENOS AIRES, Oct 24 (Reuters) - Argentine lawmakers began discussing the government’s austere 2019 budget on Wednesday, which is expected to be approved in the lower house after extensive debate despite massive protests outside Congress led by teachers, social organizations and leftist groups.

The legislators began discussing the budget in a plenary session shortly before noon. President Mauricio Macri needs the budget to pass to maintain his economic adjustment plan and continue his effort to turn Argentina’s recession-hit economy around.

“We have important support, based on an agreement signed by the president with provincial governments to ratify several measures, among them the approval of the national budget,” Congressman Luciano Laspina, who is affiliated with Macri’s political party, said in an interview with local station Radio Mitre.

Because Macri’s “Cambiemos,” or “Let’s Change” party, does not hold a majority in either chamber of Congress, it negotiated with some provinces to minimize the social impact of economic adjustment measures in exchange for the votes necessary to pass the legislation.

The budget features sharp reductions in government spending and tax increases aimed at achieving fiscal balance in 2019.

Macri’s government committed to balancing the budget at the behest of the International Monetary Fund, which signed a $57 billion standby financing agreement with the South American country earlier this year.

‘FACING LOOTING’

Amid a light drizzle, thousands of protestor gathered in front of Argentina’s Congressional Palace, blocked off by police with metal barricades. Teachers from across the country, one of the groups hardest hit by Macri’s fiscal belt tightening, thronged the capital Buenos Aires to march against the budget cuts.

“We have to face looting by the government. Today we have to be on the street in front of the Congress, resisting,” Myriam Bregman, a lawmaker with the Socialist Workers Party said. Leftist lawmakers, as well as Peronist factions have planned to vote against the law.

If the budget passes the lower house, the legislation will move to the Senate in November for a vote ahead of the Group of 20 Leaders’ Summit, which will take place in Buenos Aires at the end of November.

Analysts expect the budget to pass, but are cautious about the government’s ability to implement Macri’s austerity measures in practice, as the recession and high inflation are expected to continue in 2019.

Some economists also fear the government may relax its austerity measures ahead of the 2019 presidential election for political gain.

Macri has said he would seek re-election, although his popularity has dwindled as a result of the country’s economic malaise in 2018.

Reporting by Gabriel Burin, Writing by Scott Squires; Editing by Bernadette Baum

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