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A round on social networks between the general manager of the AFP Association, Fernando Larraín, and the socialist senator Alfonso de Urresti, the government’s statements and the doubts of some parliamentarians with the decision not to apply taxes to the highest incomes, has marked the prelude to the processing of the second withdrawal of 10% of the pension funds in the Constitution Commission of the Upper House.
The instance scheduled the session from 5 pm to generally dispatch the initiative dispatched with an overwhelming vote of 130 votes in favor in the Chamber of Deputies. According to Senator De Urresti, the intention is to process it quickly, so the private vote was left for Monday.
In the Government they do not change the script to demonize the project, despite the crisis unleashed by the broad support of the ruling party in the Chamber and the announcement of several senators from Chile We are giving their support to the second withdrawal, which opens the door to a new approval.
This day the Minister of the General Secretariat of the Presidency, Cristián Monckeberg, reiterated the script to “demonize” the project, and warned on Infinite Radio that “you have to understand that this is going to bring complications, not for this Government, because this government we all know is already in its final stage, but for the next ones anyway, because this situation will have to be taken care of ”.
The minister also insisted on the need to advance in the pension reform, and in fact the Government would evaluate the possibility of linking retirement with this project, a plan B that in any case has not yet been defined but that arouses suspicions in the sector . “We cannot think of last minute proposals when the 10% are going to vote,” warned the UDI Senator Iván Moreira in The second.
Another path considered by La Moneda would be insist on turning to the Constitutional Court, but not by appealing to the argument of the 2/3 quorum –which was struck down in the massive vote of the House- but based on the fact that the Constitution cannot be changed through transitory norms without modifying the text of the Magna Carta or or by appealing to the exclusive power of the President of the Republic of legislative initiative in matters of fiscal expenditure and in matters of social security. According to what was reported by Third, the President would have the draft “ready” to make the presentation to the TC.
But it is a questioned path from the opposition. Via Twitter, the President of the Constitutional Commission, Matías Walker (DC) warned that “beyond being unpopular to resort to the TC against # secondoretiro10xciento it would only have a delaying effect. Individual capitalization system is enshrined in the law, not in the CPR. It is lawful in a regular transitory exercise of the right to social security due to the pandemic ”.
In the “internal” of the Government, Monckeberg, who has been questioned together with Minister Ignacio Briones from his own sector for his deployment in the processing of 10%, was supported by the Interior Minister Rodrigo Delgado. According to the chief of staff, “Minister Monckeberg is doing a great job with Minister Briones.”
In addition, the Minister of the Interior described the 10% procedure as a discussion that is in progress ”. “It is not easy, because effectively the objective of the Government is to think of people now and in the future of people. Not only do you have to think about immediacy, which can be very attractive from the point of view of different considerations, but you have to think about what will happen to people in the future, you have to be responsible with that, “he said.
The resignation of the AFPs
In this scenario, the AFP Association spoke, through its general manager Fernando Larraín, who assumed that the possibility of a second withdrawal of 10% being approved is “very high” and that “something strange” would have to happen so that it does not come to fruition. He also assured that his organization has not instilled fear in the face of the project. But he warned, yes, that this could have a certain “effect” in the future. In that sense, and reiterating what was said a few days ago by the same executive, if the initiative proposed by the opposition is approved, “4 million people will not have pension savings.”
In conversation with Radio DunaLarraín was undaunted by the project of the second withdrawal – which is being discussed this Friday in the Senate Constitution Committee – and said that, in reality, those who put “cuckoo” with the first instance “were others who said that the country I was going to collapse and stuff. ” For the boss of pension fund managers, the catastrophe “was not going to happen.”
“What we said was that a withdrawal where more than US $ 15 billion will be withdrawn could have an effect,” explained Larraín, stating that, however, at the end of the day, “workers will pay the cost of the crisis with their own pension savings and that is not good for pensions. “
Fernando Larraín commented that if the measure is approved “more than 4 million people will not have pension savings” and, according to the radio station, “the main affected will be young people and women.” But despite the warning, the general manager of the AFPs promised to comply “fully” with what the norm says.
“Face of the AFP with everything defending its business”
Larraín’s sayings did not go unnoticed and he was addressed on Twitter by the senator of the PS and president of the Constitutional Commission of the Upper House, Alfonso de Urresti, who criticized that the “face of the AFP” is “defending his business without caring how deeply unfair the system is to the majority. “
“I remind Mr. Larraín that he has not yet responded to a formal request from the Senate to report how much the managers of the administrators he represents are pocketing,” the Socialist senator lashed out.
For his part, the senator added, “I will continue to seek the # SegundoRetirodel10xciento, since millions of Chileans urgently require it. In addition, with the greatest of convictions, I will continue working for Chile to end the AFPs and move towards a real security system Social”.
De Urresti recalled that this Friday the Senate Constitution commission, which he presides, is summoned “to see this project as soon as possible” and, as he said, it will not be delayed or wait any longer because “what is relevant – he added – is to pronounce in the commission and later in the Chamber to be able to have a law of the second withdrawal without fine print.
According to the Socialist senator, the idea is that the law is clear and that the money can be withdrawn as soon as possible “in order to help millions of families throughout Chile.”
What happened to the highest income tax?
Meanwhile, the Senator of the Socialist Party Juan Pablo Letelier He said that “it must be recognized that withdrawing pension funds is not good”, however, “now it is coming back because we are still in a pandemic and the needs continue”; argument.
Letelier assured Cooperative radio that, according to what he has heard, people do not have any attachment to the pension system and said that he will support if or if retirement, however, he considers that there should be a restriction for people with higher incomes who have not had losses and that they took advantage of the first process.
“I am from a left wing thinking matrix and I understand that one pays taxes when one is in a certain range of income upwards. So I do not understand why such an obvious principle was left aside in the Chamber of Deputies that the rich pay taxes” .
“It seems populist to me,” Letelier said, calling for Chile Vamos so that they “understand that the individual pension system is not enough for more.”
“We need a supportive one,” concluded the senator.
Risk of rising inflation
The warnings come, once again, and not only from the general manager of the AFP Association, amid the discussion of the second 10% withdrawal. Economists pointed to Third that, with the approval of the project, there could be a break in the stock of products that would raise inflation expectations for the end of this year. According to the experts, there is also the 14.9% increase that accumulates in the price of oil in the month, which has a direct impact on the price of gasoline and others.
“This rise in the CPI for the coming months is mainly associated with the approval in the Chamber of Deputies of a second withdrawal of funds from the AFPs, a withdrawal that if it were to materialize could raise inflation -although to a lesser extent- as it was the first withdrawal, ”said Martina Ogaz, an economist at EuroAmerica, who raised her projection for closing inflation from 2.4% to 2.7%.
Felipe Ruiz, an economist at Bci, added to the morning that they consider that an important part of the increases in prices of goods comes from a recovery of margins of companies, together with the increase in demand as a result of the income that households have received in the last time. Going forward, he says, “it is possible that the new partial withdrawal of pension funds will continue to generate pressure on prices in the short term and the risks will be biased upward.”
Let us remember that, until August, the country’s inflationary scenario was in line with the weakness that domestic demand was showing due to the pandemic and confinement. That situation, in September, began to change, since the opening of the economy and the greater resources available to citizens – due to the first withdrawal of 10% and the transfers made by the government – boosted demand. That month inflation was 0.6%; twice what the market expected.
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