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The Pension Reform proposed by Cambiemos, which targets pensions and family allowances, has garnered wide criticism. In the early hours of Tuesday, Congress approved the unpopular reforms amid massive protests with 127 yes votes, 116 no votes and two abstentions.
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In an interview with Italian newspaper La Stampa on Saturday, Pope Francis revealed his concern for the situation in Argentina declaring: "a people that don't care for their grandparents have no future."
The reforms affect retirees and people who receive non-contributive pensions and family allowances by changing the formula used to increase pensions and allowances.
Since 2009, pensions and family allowances were increased every six months based on a formula that combined the variation in the incomes of registered workers and tax revenue in equal parts. Now, pensions will be adjusted every three months using a formula that combines variations in the consumer price index for 70 percent and the variation in the incomes of registered workers for 30 percent.
Carolina Avila and Silvia Stag of La Nacion applied the new formula to the increases received during 2017 and their results show that early retirees who receive the minimum pension would have received US$225 less that year.
According to the Research and Formation Center, CIFRA CTA, the new formula expects a 5.7 percent increase for the first trimester, applicable in March 2018, while the increase without the reforms would have been between 12.7 percent and 14.5 percent. The law also contemplates a "voluntary" increase in the age of retirement to 70 when the current age is 60 for women and 65 for men. Furthermore, the Network for the Rights of People with Disabilities said the law affects them because the new formula will make them lose US$178.
The reform comes after two IMF visits to the country. On October 2016, the IMF issued its country report 16/346 in which the directors emphasized the need for "restoring financial sustainability to the pension system" through measures such as the increase in the female retirement age and lowering the ratio of the benefit to the last wage earned from 82 percent to 60 percent.
In the same document, the IMF cited important progress in economic policy. Among them was the elimination of controls over the value of the peso and the increase in utility tariffs that "has brought prices more in line with underlying costs." These two changes were adopted early in President Mauricio Macri's administration and had a high impact on low-income sectors reducing their purchasing power as the peso lost 40 percent of its value and utility bills increased.
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Human rights organizations like Mothers of Plaza de Mayo and the Permanent Assembly for Human Rights criticized the measures adopted, saying the reform means "a dispossession of retirees, pensioners and beneficiaries of the family allowance, with the explicit objective of paying the external debt."
Argentine human rights activist Adolfo Perez Esquivel, who was detained and tortured during the military dictatorship in the late 1970s, condemned the government's response to the people's discontent and called for a referendum.
"The people mobilize massively but Cambiemos is willing to kill shooting lead bullets to cut pensions and the AUH (family allowance)," he said.
"We demand a referendum so the people decide."
During a Tuesday press conference, Macri said "Argentina lives in a climate of peace" in spite of seven days of protest that began with opposition to the WTO Meeting that took place in Buenos Aires. Macri also revealed new changes.
"We will have to face many reforms," he said, acknowledging "these changes generate discomfort but they are necessary."
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