Defeat for Gabriel Boric in Chile: They reject his plan to limit the withdrawal of pension funds

Defeat for Gabriel Boric in Chile: They reject his plan to limit the withdrawal of pension funds

It happened in Parliament tonight; Aimed at imposing restrictions on the use of pension money, arguing that it would lead to inflation

Gabriel Boric, President of Chile
Gabriel Boric, President of Chile

After an extensive session, the Chilean parliament rejected the president’s draft Gabriel Boric for that Restrict the withdrawal of pension funds Operates a Strong Pension Fund Administrator (AFP) and uses it to fund other expenses. That same night, another bill promoted by lawmakers that promoted the “Fifth Withdrawal” also failed to get approval for a 10% withdrawal from the fund to mitigate the effects of the corovirus pandemic.

What a long day it was at the plenary session of the Chamber of Deputies, which began on Monday afternoon and lasted until midnight. Tests the government’s ability to negotiate and equalize coalition members In Congress.

It took 93 votes to approve the parliamentary initiative, but He was denied With 70 votes in favor, 70 against and 12 abstentions. At the same time, the draft of the executive power received 68 supporters, 83 against and 1 abstention. Refused.

After the vote, National Renewal (RN) MP Jorge Duran said the government would have to be “responsible” for what happened and called for reform “that would really help move Chile’s pension system forward”.

Boric, who has previously agreed to this type of initiative, said this time that if withdrawing money (or more than usual) could lead to a dramatic jump in inflation, he therefore proposed a project that would allow “more limited” funds to be withdrawn.

In an attempt to halt the removal of 10 per cent of temporary funds from the Pension Fund Administrators (AFP) system, the country’s private pension system, various Chilean ministers in Boric’s executive branch were nominated last week. Restricted withdrawal alternative By social security criteria. This initiative has dealt with exceptional cases where 10% of AFP funds are authorized to be withdrawn, such as alimony payments, health debts or first home dividends.

Chilean President Gabriel Borici offers a press conference to foreign media at La Moneda Presidential Palace in Santiago, Chile, on Monday, March 14, 2022. (AP Photo / Esteban Félix)
Chilean President Gabriel Borici offers a press conference to foreign media at La Moneda Presidential Palace in Santiago, Chile, on Monday, March 14, 2022. (AP Photo / Esteban Félix)

However, this initiative of the executive was not welcomed. This was one-fifth of the massive withdrawal amount And it has restricted access to resources for alimony payments, mortgages and other debts that the government believes will not produce an inflationary effect. Now the project will be suspended and a ban on legalizing the law with the same characteristics will be imposed for one year.

While in other cases, left-wing MPs and parliamentarians have confirmed the withdrawal and the transfer to other expenditures and facilitated the withdrawal of these funds by the AFP to overcome the economic impact of the corovirus pandemic on Chilean families, this time the government noted. That the situation is now different for promoting broad and unconditional withdrawals from pension funds: the economy has been able to recover and the health crisis has diminished.

“Naturally, this is less harmful than a full retirement, but it does increase disposable income and may have some impact on demand and inflation,” the Bank of America said in a recent report.

Dissatisfaction of the left-wing Boric government Strongly grown It has been more than a month since Chile took office amid high expectationsNoted two recently published studies.

The 36-year-old president was elected in December by a historic vote against ultra-conservative candidate Jose Antonio Cast, who was backed by a broad left-wing coalition of Communists, environmentalists and the Social Democrats.

Source: La Nacion

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