ARENA Uses Midnight Legislative Session to Approve More Debt and Sideline Democracy

News

At around midnight last night, ARENA pushed through a major financial reform to the country's retirement system that it had presented to the legislative assembly a little more than a week ago. The reform, which was opposed by unions, the social movement, and the FMLN privatizes the remaining public pensions by forcing the government to emit long-term certificates (like bonds) that will be bought by the private pension administration companies in order to pay retirees. This political move bails the government out in the very short term by delaying payment of debt, as the country is experiencing a large public deficit which has been financed each year by international loans. At the same time, the new law guarantees profit for the wealthy financial sector that has made $285 million dollars in worker-paid commissions alone since the system was privatized in 1998. Politically, ARENA seeks to avoid having to negotiate with the FMLN in the legislative assembly around the national budget, since a qualified, or two-thirds, majority is needed to approve international debt. The FMLN criticized the legislation as irresponsible and unconstitutional.

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