The Argentine President Javier Milei obtained at the end of August an important victory in the Chamber of Deputies to continue his economic stabilization plan. The partisan alliance of the Pink House approved the proposal that seeks to prevent the Central Bank from continuing to finance spending by the State, the federal government, or the provinces.
The project still needs to be endorsed by the Senate to become law. If approved in the Upper House of the Argentine Congress, Argentina may get rid of the mechanism that allows currency issuance to cover deficits in public accounts.
The article mentions that this mechanism is similar to what existed in Brazil until the implementation of the Real Plan. Milei's proposal seeks to end this practice of direct public spending financing by the Argentine central bank.
Despite the success of the anti-inflationary shock imposed by the government, the measure also generated negative effects in the Argentine labor market, causing political wear on the president.
