The lower house of Argentina’s Congress approved on Thursday an unpopular austerity budget designed to meet the requirements of a $57-billion IMF bailout.
The vote came in the early morning after 14 hours of debate and a day of unrest that saw police fire tear gas at people throwing rocks outside the legislature building to protest the 2019 blueprint’s bitter cocktail of tax increases and spending cuts.
The vote tally was 138 in favor to 103 against, with eight abstentions. The draft now goes to the Senate for final approval.
Unions and the leftist opposition have criticized center-right President Mauricio Macri’s economic program of sweeping spending cuts to meet the deficit-reduction requirements of the IMF loan.
The bailout is supposed to help Argentina recover from an economic crisis in which the peso has lost half its value this year, inflation is forecast to finish the year at 40 percent and the economy is expected to shrink by 2.6 percent.
“We are in a crisis and the government must take responsibility. Social problems and the recession oblige us to pass the law,” ruling Cambiemos party lawmaker Mario Negri said in a speech after the budget passed.
“To have no budget would be a defeat for the country,” he added. Macri has pledged cuts of $10 billion in health, education, science, transportation, public works and culture.
“No to the IMF budget. Don’t cut our future!” shouted demonstrators outside Congress while, inside the chamber, tempers ran high as lawmakers jostled and traded insults ahead of the vote.
“In Argentina, austerity programs always end up in a crisis. Why do they think the Titanic is not going to sink this time?” lawmaker Agustin Rossi of the center-left Front for Victory party of former president Cristina Kirchner said after the vote.
Street protests have reflected growing public anger after Macri slashed civil service jobs as part of a bid to cut Argentina’s fiscal deficit and tame inflation at the IMF’s behest.
The budget deficit was 3.9 percent of GDP last year. The government aims to get it down to 2.7 percent in 2018 and zero by the end of next year.
To halt the collapse of the peso back in April, Macri’s government reached a bailout deal with the IMF, with which Argentina had practically severed relations after defaulting on its foreign debt in 2001.