Argentina's Central Bank reform faces scrutiny over 'loophole' for leadership removal

Argentina's government is advancing a significant reform of the Central Bank's charter, aiming to provide greater insulation for its president and directors. The initiative, which has involved extensive work and consultation, seeks to establish a higher threshold for their removal from office. Officials confirmed that President Javier Milei, Economy Minister Luis Caputo, and Central Bank President Santiago Bausili worked late into the night on the project, with further revisions by deregulation minister Federico Sturzenegger and legal secretary María Ibarzábal Murphy. The core of the reform proposes that removing the Central Bank president and directors would require a special two-thirds majority in both the Chamber of Deputies and the Senate. Currently, such changes could theoretically be made by a simple decree, alongside a non-binding opinion from a bicameral commission. This new provision is intended to safeguard the bank's leadership from political whims. However, a notable "loophole" has emerged, raising questions about the reform's long-term effectiveness. While the current project requires a supermajority for removal, a future government could simply propose a new law to amend the Central Bank's charter again. Such an amendment would only require a simple majority in Congress, allowing for the removal of leadership without needing the supermajority. This could also potentially be achieved through a Presidential Decree (DNU). Government sources acknowledged awareness of this potential "loophole," stating it was extensively discussed. They considered requiring an "aggravated majority" to amend the charter in the future but deemed it potentially unconstitutional, as it could restrict Congress's legislative power beyond what the Constitution mandates. Officials emphasized that any government attempting to alter the charter again would face significant political costs. The article also mentions that former Central Bank president Mercedes Marcó del Pont commented on the matter on Friday.