The Chamber of Deputies of the Congress de Chile rejected a fourth withdrawal from pension funds managed by the AFPs, after voting against the sixth proposal that sought to give access to retirement savings. During the COVID-19 pandemic three withdrawals were approved. The initiative, which was voted on last Wednesday, June 7, lost by 63 against, 48 votes in favor and 3 abstentions.
The project, which merged a dozen withdrawal projects, which ranged from a 100% withdrawal, to partial withdrawals with conditions or other options with the possibility of withdrawing 10% of the AFP funds, had already been rejected by a large majority in the Constitution Commission, with 10 votes against. and three in favour. All this was voted as a single constitutional reform.
With this, the uncertainty generated in the economy of the country to keep said debate open and the door is closed to be able to process the matter again for one year.
He Minister of Finance, Mario Marcel, warned about the negative effects that would occur if an initiative of this type was approved, where, among other things, he explained to the deputies that the difference between the voting of the first three withdrawals and the current one is that “the associated economic risks are explained as hypotheses, today, those hypotheses have been fully proven. There is overwhelming evidence not only that the negative effects on pensions, inflation, the exchange rate, mortgage credit, were significant and growing, but that they materialized much faster than expected.
In the Chamber room, prior to the vote, he also detailed that the economic scenario has changed with respect to the moment in which the first three withdrawals were approved, and pointed out that although inflation, which was increased by the previous withdrawals, “It’s still triple its normal levels.”
After the rejection of the initiative, Marcel stated that this is another opportunity in which these proposals are rejected. “It means that the vast majority of parliamentarians have understood that withdrawals are not help for citizens”he commented.
The Financial Stability Board (CEF) He also warned about the negative effects that the project has on the stability of the financial system, among them, the negative impact on pensions, where they indicated that if another withdrawal is approved, 36% would be left without a balance in their accounts.
From the CEF they also warned that if another withdrawal materialized there would be a reduction in household savings and in the depth of the capital market, with long-term negative effects on investment, the cost of financing and the economy’s growth capacity.
The president of the Central Bank, Rosanna CostaLikewise, a few weeks ago he warned the deputies in session of the Constitution Commission that “a new withdrawal would add a new inflationary impact, without a doubt.” And he said that “instead of continuing to reduce inflation, what we are going to see is that inflation will remain at current levels or may even rise between now and the end of the year.”
Source-elpopular.pe
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