Argentina’s President Javier Millay fired his labor minister for overseeing a 48 percent increase in presidential pay last month amid a government austerity drive, in the first scandal to hit the government.
Miley’s gross monthly salary rose from just over 4 million pesos ($4,700 in Argentina’s official exchange rate) in January to just over 6 million pesos in February. Members of the leftist Peronist opposition released details of a decree imposing the increase signed by the president.
Automatic indexation
Millay said he ordered the firing of Labor Minister Omar Yassin for “a mistake that should not have happened” and reversed his salary increases for himself and his cabinet. The president said the raises were automatically triggered under rules set by previous Peronist governments when civil servants’ salaries were indexed — inflation currently runs at 250% a year.
Analysts said the episode could prove damaging for Millay, who was elected in November on a dual pledge to resolve Argentina’s worst economic crisis in two decades and end perks for the political elite he blames for causing it.
The president, who has a slim minority in Congress, has repeatedly said he will rely on his public popularity to pressure lawmakers to support drastic spending cuts and sweeping deregulation.
Javier Millay’s Uncertain Path to the Promised Land
Last week, Millay’s vice president and Senate leader Victoria Villaruel and lower house leader Martin Menem approved a 30 percent pay raise for lawmakers. Miley told local media on Thursday that he asked them to reverse the increases.
The public reaction to Millay’s first scandal was likely to be determined by how quickly he was able to show progress in the economy.
Official inflation data released on Tuesday is expected to show that prices rose about 15% on average in February. While it improved from January’s 20.6%, that would still be among the highest monthly rates in the world.
If people believe that things are not getting worse as fast as before, these episodes can be minimized. But if the government can’t show results, that’s when people start getting angry and revolting.
