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Crisis due to new withdrawal of pension funds in Chile hits Piñera again

Chile is going through a new political crisis due to the clash between President Sebastián Piñera and Congress over a controversial third withdrawal of pension funds, given the damage caused by the pandemic to citizens and late social benefits.

After five weeks of quarantine in much of the country and the resurgence of social protests, Congress approved on Friday by a large majority the withdrawal of up to 10% of private pension funds, a measure with broad popular support.

Promoted by the center-left opposition and with the support of broad sectors of the ruling party in the face of the delay in the delivery of social aid, the initiative was challenged by the government before the Constitutional Court, which has already ruled against a similar initiative that was proposed a second withdrawal.

However, in the previous instance, the withdrawal took place after the presentation of a government project, which received legislative approval.

Now, Piñera, who suffers a sharp drop in popularity, resorts to a similar strategy with the presentation of his own project, in order to defend the power of the presidential to raise aid at the expense of the treasury.

Without substantive changes regarding the opposition initiative, Piñera’s proposal, which he announced on Sunday night, aggravated the tension between the two powers at a time when dock workers began a standstill and several unions called for a general strike on Friday in rejection of the decision of the president to appeal to the Constitutional Court.

The new articles “do not formulate any substantive objection to the bill approved by Congress, so it could well have become law and acted with the diligence demanded by the current situation,” said 21 opposition senators on Monday in a joint statement.

The opposition reproaches Piñera that social aid has been few, selective and late for the magnitude of the prolonged quarantines that have impacted the pockets of the middle and lower classes of this country.

Although the new proposal provides a bonus of 200,000 pesos ($ 285) for those who had their accounts in zero with the two previous withdrawals authorized in July and January, it adds a controversial proposal to recover the funds.

Thus, it proposes an increase of 2% to the contributions of the employers and a contribution from the State to recover the funds of the questioned Pension Fund Administrators (AFP), one of the axes of the citizen annoyance that led to the social protests of October 2019.

With his proposal, the president “has expressed the will to give more resources to the AFPs, which results in the strengthening of an exhausted system, and also to tax the middle classes, -especially small and medium-sized businessmen- with new taxes,” he adds. the declaration of the senators.

– Political clouds-

Without attempting a prior agreement with the opposition or listening to the protests’ demand to quickly access a third withdrawal, Piñera’s new strategy accentuated the deep institutional and political crisis facing his government, said the academic political scientist from the University of Santiago. , Marcelo Mella.

“The way of making decisions is not only technocratic, but also extremely elitist, with little conversation, and part of the malaise that characterizes Chilean society today is the demand for a democracy where the recipients of the policies are more considerate “Mella told AFP.

With popularity at the lowest level for a president since the return to democracy (9%), Piñera has even lost the support of his allies, which was expressed in the harsh political defeat he suffered in Congress last Friday.

“The only thing that his proposal achieves is to deepen the mistrust generated by him and his government; it is late and exacerbates an institutional conflict that is installed in Congress,” said right-wing senator Manuel José Ossandón.

In an electoral year in which in three weeks people go to the polls to elect mayors, councilors and constituents, before the presidential and parliamentary elections in November, the most radical and populist positions are gaining ground like never before in Congress.

“It will be difficult to find in the history of the Chilean Congress a more destructive legislature than the current one,” said columnist Héctor Soto.

With a pandemic still far from being resolved – despite the advance of the vaccination process – and an economic reactivation that will take longer than expected, “the truly threatening clouds for Chile are those that have settled on the political plane,” Soto warned in his analysis.

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