Argentina's Milei Government Submits Central Bank Reform Bill to Congress

Following President Javier Milei's national address, his administration has formally submitted a bill to Congress to reform the Central Bank's organic charter. The proposed legislation, introduced in the Chamber of Deputies, aims to redefine the bank's primary objective to solely preserving the value of the currency and explicitly prohibits it from financing the Treasury, either directly or indirectly.

The ruling party and its allies are reportedly aiming to pass the bill in August, alongside reforms to the Fiscal Innocuousness Law. While some parties, like the PRO and UCR, have shown gestures of support, others, particularly from the Peronist bloc, have labeled the project a "Trojan horse" intended to keep Santiago Bausili in the position of Central Bank president. Concerns have also been raised about inconsistencies within the bill's text, with the ultimate outcome likely depending on the stance of provincial representatives aligned with governors.

A key point of contention is the proposed modification to the removal process for the Central Bank president. The current charter requires the Executive to obtain the prior advice of a congressional commission for removal, but in practice, presidents have often been appointed and removed arbitrarily. The new bill stipulates that removal would require a two-thirds majority vote in both chambers of Congress. This change is controversial, especially as Bausili's own Senate ratification has been pending since 2023, and removals have typically been framed as voluntary resignations.

Opposition parties, including Unión por la Patria and the Left, have voiced strong criticism. Nicolás del Caño of the Left stated that the bill represents a "historic demand from the IMF" and would be celebrated by Kristalina Georgieva. Peronists argue that Milei's proclaimed Central Bank independence is a facade, pointing to Bausili's participation in Cabinet meetings. Some, like Maximiliano Ferraro of the Civic Coalition, caution that without modifications to the Decree of Necessity and Urgency Law, future governments could potentially alter the Central Bank's organic law with a simple decree.

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This bill is a historic demand from the IMF. Kristalina Georgieva celebrates.