Argentina is evolving to include a new, restrictive budgetary framework aimed at preserving the country’s fragile economic balance. President Javier Milei introduced the ‘Draft Law on National Commitment to Fiscal and Monetary Stability’ to Congress last week, seeking to enshrine his administration’s zero-issuance policies as law for future governments to follow.

According to presidential spokesperson Manuel Adorni, the project’s primary objective is to ensure that budget proposals yield a balanced financial result, avoiding the issuance of unbacked cash to finance expenditures.

Adorni stressed that expenditures outside budget laws will be prohibited, and officials will not be able to execute unauthorized expenses.

He stated:

All regulations that violate these provisions will be null and void, meaning there will be no laws that undermine fiscal balance and do not establish how planned expenditures will be financed.

The bill also defines penalties for officials who violate its rules, contemplating the inclusion of new types of crimes in current regulations to sanction those who breach the bill’s statutes.

The proposal comes after Milei vetoed a series of laws approved by Congress that proposed increases in state pensions and emergency spending for disability purposes, which could only be funded by printing money.

Since his first day in office, Milei has implemented the ‘chainsaw’ model, cutting thousands of jobs and reducing the footprint of public institutions deemed too large or ineffective.

These measures have achieved milestones such as controlling inflation and stabilizing the dollar exchange rate, leading to a reduction in poverty in Argentina. Nonetheless, Milei is not without critics.

Saifedean Ammous, author of the best-selling book The Bitcoin Standard, has heavily criticized Milei’s economic playbook, stressing that the country is walking towards a debt default scenario.

Read more: Milei to Curb Treasury’s Ability to Print Money for Financing Public Spending

Read more: Bitcoin Standard Author Debunks Claims of an Economic Miracle in Argentina

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