Argentina Approves Heavily-Protested Austerity Budget After $800M Treasury Bill Sale

Early Thursday, Argentina’s lower house approved the heavily-protested austerity budget, which was designed to meeting a $57-billion International Monetary Fund (IMF) bailout requirement.

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"We are in a crisis and the government must take responsibility. Social problems and the recession oblige us to pass the law," Cambiemos party lawmaker, Mario Negri, said in a speech after the budget was passed. "To have no budget would be a defeat for the country.”

The Congress voted 138 in favor of the budget, 103 against while eight were abstentions. The vote was pushed through in the wee hours of Thursday morning following a lengthy 14-hour debate session and violent unrest, in which the police fired tear gas and rubber bullets into crowds of people outside the legislature building.

Argentines clashed with security while demonstrating against the government’s plans - tax increases and spending cuts - that will affect the measures that are required to acquire aid from the Fund.

"No to the IMF budget. Don't cut our future!" demonstrators were heard shouting outside the Congress. "In Argentina, austerity programs always end up in a crisis. Why do they think the Titanic is not going to sink this time?" a second lawmaker, Agustin Rossi, remarked after the vote.

Multiple unions and opposing politicians have criticized Argentina’s right-wing President Mauricio Macri's economic cut programs put in place to meet the deficit-reduction requirements of the IMF loan. The president had vowed to slash US$10 billion in health, education, science, transportation, public works and culture.

Argentina is currently facing an economic crisis, in which the peso lost half its value in 2017. By the end of 2018, inflation is expected to climb to 40 percent and the economy is expected to shrink by 2.6 percent. According to the treasury ministry, over US$800 million worth of dollar-denominated treasury notes, which carry an annual interest rate of 5.5 percent, were sold Wednesday. The 182-day notes will expire on April 26, 2019.  

The draft will now head to the Senate for final approval.