Argentine Senate Passes Emergency Economic Law

Argentina's Senate Saturday approved an emergency economic package announced by the new center-left government to try to lift the country out of crisis.

Poverty is near 40 percent in the South American country, which is in recession and has suffered 18 months of economic crisis sparked by a currency crash.

It is Alberto Fernandez's first legislative victory since he assumed office on December 10 after defeating Mauricio Macri in the presidential election.

The law will include imposing tax increases on sectors of the upper and middle classes, as well as providing tax incentives for production and tax benefits to the most impoverished classes.

It passed with the help of allies early Saturday by 41 votes in favor, 23 against and one abstention after a marathon 12 hours of debate in the upper house.

The new law imposes a 30 percent tax on foreign currency purchases and payments and withdrawals made abroad either in cash or by credit card, while maintaining a purchase cap of $200 per person per month.

It also urgently seeks financing to subsidize a plan to provide free food cards for more than two million people -- in a country with 44 million inhabitants -- and with the worst economic and social indicators since the 2001 crisis.

External debt is at roughly 90 percent of GDP, inflation is around 55 percent, and unemployment is at 10.5 percent.

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