×

Argentina freezes some gov't salaries, cuts jobs in austerity push

BUENOS AIRES, Jan 29 (Reuters) - Executive branch government employees in Argentina will get no pay raises this year and one out of every four "political positions" appointed by ministers will be cut, President Mauricio Macri said on Monday, deepening his austerity drive.

The clampdown on political positions, including advisers appointed by government ministers, is viewed as an attack on a patronage system that has been in place for decades.

The firings, expected to save $77 million per year, are symbolic of Macri's drive to regain market confidence.

"Austerity has to be part of politics," Macri said in a televised address.

He spent the first two years of his administration dismantling the trade and currency controls set up by his predecessor, Cristina Fernandez, who had expanded the role of government in the economy.

He was elected in 2015 with a mandate to free the markets and improve Argentina's business climate.

Macri, expected to seek re-election next year, denounced "the corruption and clientelism" of past administrations. Included in the measures announced on Monday, family members of ministers were banned from holding government jobs.

Macri scored a series of business-friendly legislative wins late last year after his coalition swept mid-term elections. But passage of his pension reform bill last month triggered violent protests and a decline in the president's approval ratings.

Pressured by the country's powerful labor unions, the government canceled a special session of Congress planned for February to debate Macri's proposed labor reform.

The bill includes amnesty for companies that register workers who had been paid off the books. It aims to curb litigation by workers and would lighten social security taxes paid by employers. The private sector has long argued for more flexibility in labor regulations. (Reporting by Hugh Bronstein; Editing by Jeffrey Benkoe)