Violent protests erupt in Argentina over pension reform

19 November 2017: President Mauricio Macri, elected in 2015 with a mandate to lift the heavy-handed currency controls favored by his leftist Peronist predecessors, says Argentina needs pension reform to cut the deficit, attract investment and promote sustainable growth.

Debate on the bill was suspended on Thursday due to violent demonstrations. Macri then promised to decree a bonus payment to the neediest retirees. But that did nothing to satisfy the opposition and union activists who converged on Congress again on Monday as lawmakers debated the proposal inside.

Balaclava-wearing protesters used sling shots to fire rocks at police, who answered with water canon and tear gas, turning the vast lawn in front of the capitol into a battleground.

"This bill will put millions of retirees at risk. It changes the whole pension system," Laura Rivas, a 34-year-old teacher told Reuters, standing back from the most violent protest areas.

"We are going to have to work more years before we can retire, and then the pension payments we get will be minimal, so it hurts us as workers," she added.

Others closer to the front line shouted attacks on Macri, accusing him of balancing the budget on the backs of the poor.

The reform has already passed the Senate, leaving the lower House to give final legislative approval.

Opposition lawmakers joined the protesters in dismissing the bonus sweetener.

"It will be a one-time bonus payment made in March," opposition lawmaker Agustin Rossi told reporters, adding that the overall bill remained inadequate to meet pensioners' needs.

The 24-hour-long strike called by Argentina's main CGT labor group started at noon (1500 GMT) and was expected to paralyze Tuesday morning commuter traffic.

The pension bill would change the formula used to calculate benefits. Payments would adjust every quarter based on inflation, rather than the current system of twice-yearly adjustments linked to wage hikes and tax revenue.

Economists say the current formula means benefits go up in line with past inflation. Left unchanged, that could harm Macri's efforts to cut the deficit.

Under the proposed formula, benefits would increase by 5 percentage points above inflation.

The plan would take effect at a time of lower inflation expectations, hence slowing the pace of pension benefit increases.

Macri is aiming to cut the fiscal deficit to 3.2 percent of gross domestic product next year from 4.2 percent this year, and reduce inflation to between 8 percent and 12 percent from more than 20 percent this year.