The Argentine Supreme Court rejects two lawsuits against Milei's economic deregulation decree

Javier Milei has received good news from Justice: the presidential decree of economic deregulation with which he began his mandate in Argentina four months ago is still in force. The Supreme Court of Argentina unanimously rejected on Tuesday two lawsuits against the constitutionality of the decree of necessity and urgency (DNU) that modified 300 regulations at a stroke. As an argument for their adverse ruling, the judges maintained that the lawsuits did not present a concrete case or controversy to be resolved. By alleging this technical aspect, the court avoided ruling on the constitutionality or otherwise of the decree.

According to the Supreme Court, the complainants – the governor of the province of La Rioja, Ricardo Quintela, and the former president of the Bar Association, Jorge Rizzo – could not prove a direct impact on the part of the challenged norm and, therefore, they lack of procedural legitimacy to promote a judicial process.

The ruling is a great boost for Milei. He gives him the certainty that Justice will not invalidate his core decree but, at most, will sever some parts. The decision gives it governability at a delicate moment: the ruling party is currently negotiating with the Legislative Branch a second version of its law to scrap the State. His party, La Libertad Avanza, chose to withdraw the first due to the opposition's rejection of key articles.

The position of the Supreme Court has been questioned by constitutional lawyers such as Andrés Gil Domínguez, who believe that it was possible to rule on its entirety. Through his networks, Gil Domínguez maintained that the ruling enables “the existence of an autocratic system of government through the implementation of the dictation of DNUs and the replacement of the legislative function of Congress by the Executive Branch, before which the court will be a faithful companion.”

The supreme judges must still rule against other ongoing lawsuits that, unlike those discarded, refer to specific aspects of the DNU and not its entirety. The unions stopped the articles of the regulation linked to labor reforms in lower courts, while some private health insurance patients have achieved rulings in favor of the liberalization of the price of these policies authorized by the regulations.

Official limit on health companies

The outcry from the wealthy middle class against health insurance increases has grown

to a crescendo

until it has become a concern even for the president, an economist who is a staunch supporter of free market regulation. Health policy prices have increased more than 150% since the Government granted pricing freedom. The situation is especially serious for older adults, whose income has plummeted due to the official reduction in pensions but their health spending has skyrocketed due to the increase in insurance and medications.

After several warnings to the companies that dominate the Argentine health market, presidential spokesman Manuel Adorni announced this Wednesday that they will be forced to reverse the increases and adjust them to inflation, not above. According to Adorni, the measure is due to suspicion of “cartelization” of a group of companies “that represents about 75% of those affiliated with private medicine.”

Applications to the Court

The Supreme Court's decision has reduced the tension between the highest court and the Government. In a recent interview, Milei noted that “at least three judges of the Court have taken a position that is quite unfriendly to the DNU.” Without naming them, the president referred to the majority made up of Horacio Rosatti, Carlos Rosenkrantz and Juan Carlos Maqueda. The ruling contradicts the president's statements for now.

The highest court has operated with four members since 2021, when the only woman, Elena Highton, retired. Milei has nominated the controversial criminal lawyer Ariel Lijo, closer to Supreme Ricardo Lorenzetti than to the three judges already mentioned, to replace her. Furthermore, for December, when he will resign due to Maqueda's age, she nominates the conservative academic Manuel García-Mansilla, who opposes the abortion law and has a pro-market profile. If the names are approved by the Senate, which requires a special two-thirds majority, Argentina will be the only country in Latin America without women on its highest court.

The DNU has another obstacle to overcome: the Legislative Branch. The Senate rejected it in mid-March, but it has not yet been debated in the Chamber of Deputies. Unless this second chamber rules against it, it will remain valid. Unlike what happens with Justice, which can tear it to pieces, legislators can only approve or reject it in its entirety.

Among the new regulations that came into force with DNU 70/23, the deregulation of the price of private health insurance and private schools and the elimination of the rental law, which required contracting for a minimum period of three years, stand out. and annual increases. Most new contracts now range between one and two years and updates are usually quarterly at most.