March 1, 2018 / 4:26 PM / a year ago

Argentina's Macri calls for labor amnesty, defends gradual approach

BUENOS AIRES (Reuters) - Argentine President Mauricio Macri said he would propose an amnesty law for informal workers in a speech to Congress on Thursday, a sign his administration is scaling back a previously proposed labor reform that met fierce resistance from unions.

Argentina's President Mauricio Macri waves as he arrives for the opening session of the 136th legislative term at the Congress in Buenos Aires, Argentina, March 1, 2018. REUTERS/Marcos Brindicci

In the speech marking the opening of this year’s legislative session, Macri defended his business-friendly government’s so-called “gradualist” approach to economic reforms from critics who argue he should move faster to cut government spending and lower taxes in order to boost growth and attract investment.

“They ask us for a shock adjustment, and to them I say we came here to reduce poverty and make sure that no Argentine goes hungry,” Macri said. “That’s why we chose the path of ‘gradualist’ change.”

Since taking office in December 2015 after more than a decade of populist rule, Macri has reached a deal with creditors to allow Argentina to exit default, cut grains export taxes, and reduced utilities to lower the fiscal deficit to the government target of 3.2 percent of gross domestic product (GDP) this year.

Despite his “Let’s Change” coalition’s strong performance in last October’s legislative elections, it still lacks a majority, and reforms Macri has proposed since then have generated vocal opposition. A reform to the country’s pension system passed last December only after violent clashes outside Congress.

Macri had also promised more immediate and drastic changes to the country’s labor laws, widely seen as among the most costly to companies in Latin America. Certain elements of that proposal, such as lower corporate penalties for firing workers, prompted an outcry from powerful labor unions.

His focus on Thursday on just one element of the proposal, the labor amnesty, was indicative of the piecemeal approach the government now plans. One-third of workers in Argentina are off-the-books, Macri said, and the law would allow them to formally register without losing seniority or benefits.

He also called on the Senate to pass a reform to the country’s capital markets law that had previously been passed by the lower house.

Macri suggested Congress debate the legalization of abortion, a divisive issue in the heavily Roman Catholic country, even though he is personally opposed.

“I am in favor of life, but I also support mature debates,” he said.

Reporting by Luc Cohen; Editing by Jonathan Oatis

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