Argentine senate approves President Milei's 'austerity package'

Argentina's parliament has handed populist President Javier Milei his first legislative triumph, approving his economic reform package after months of debate.

"We are going to give President Milei's government the tools to reform the state once and for all," ruling bloc head Gabriel Bornoroni said in his closing speech on Friday.

Milei began congratulating himself even before the package was adopted, hailing it as "the greatest fiscal adjustment not only in Argentine history but in the history of humanity".

Zero budget deficit

His government has applied a drastic, all-out fiscal austerity program, intending to achieve "zero budget deficit" by the end of 2024 to tame chronic inflation.

But budget cuts, including the paralysis of public works, coupled with a brutal devaluation of the peso by more than half in December, have strangled purchasing power.

Politically, Friday's green light means "a total success for the government", political scientist and economist Pablo Tigani said.

But in the economic sphere, "it will be a return to the policies of the 1990s, with deregulation, privatisation and the unconditional opening up of the economy, which will deal a heavy blow to the industry and national small and medium-sized enterprises."