In Tucumán, late on Monday night, Milei signed, along with 18 governors, the May Pactwhich includes among the points the “non-negotiable fiscal balance” y “public spending around 25 points of GDP”The chainsaw was applauded by the IMF, but the Fund suggested “improving the quality of fiscal adjustment.”
What the agreement signed in July does not say is who is responsible for the reduction in spending, that is, the adjustment. According to the Congressional Budget Office, The cuts were in retirement and pensions, public workers’ salaries, student scholarshipsamong others in the first half of the year. This pact endorsed by governors, even with a sector of Peronism, promises more chainsaw.
Milei wants to reorganize the country in the image and likeness of the wishes of imperialist financial capital, but he comes up against more limits. But there is another way out, the working class can organize a serious resistance, and intervene to reorganize the economy based on the needs of the working people.
Five numbers of adjustment
The Congressional Budget Office (CBO) report noted that the National Administration revenues fell 3.6% in real terms in the first half of the year compared to the same period in 2023. Due to the recession, state revenues fellthere was a drop in Social Security Contributions (-18.0% YoY), VAT (-8.7% YoY) and Income Tax (-6.0% YoY). On the other hand, there was an increase in taxes related to foreign trade (+10.3% YoY) and the PAIS Tax (+414.7% YoY), the latter being the one that the IMF wants to be eliminated for imports.
Meanwhile, the report warns that Total expenses fell by 29.0% in real terms in the first six months of the year compared to 2023. “Around a third of this reduction was explained by the drop in retirements and pensions”warns OPC.
Source: www.laizquierdadiario.com
