By Fabian Cambero and Aislinn Laing
SANTIAGO (Reuters) – Chilean lawmakers punched the air and waved the national flag in Congress on Thursday after giving final approval to a government-contested bill to allows citizens to withdraw 10% of their pension savings to help ease the economic pain wrought by the novel coronavirus outbreak.
The bill has sped through several congressional votes with cross-party support despite staunch government opposition.
The bill required a three fifths majority, 93 votes, and 116 deputies voted in favor, with 28 against and five abstentions. A number of the 71-strong ruling coalition bloc – including the president of one of its parties – voted in favor.
The chamber erupted in cheers and clapping amid chants of “no more AFP” – a reference to the long-running campaign to tear up Chile’s much-mimicked defined contribution Pension Funds Administrators (AFP) system that was introduced during the Augusto Pinochet dictatorship.
Cristobal Bellolio, a political scientist, said the bill represented Chile’s “Brexit moment”, a symbolic blow dealt to the establishment, against the advice of experts, by an angry populace emboldened by social protests last year against inequality and state policies including the AFP system.
President Sebastian Pinera has 30 days to decide whether to veto the bill, sign it into law or refer it to the Constitutional Court.
The bill’s swift passage and surprise transversal backing has caught Pinera’s centre-right government on the back foot as it battles one of the world’s worst outbreaks of the pandemic and faces potentially more of the fiery social protests over inequality that erupted in October last year as well as the drafting of a new constitution.
Economists and ministers have said that withdrawing from pension funds will diminish already low average payouts and deliver a shock to stock, bond and currency markets.
The bill’s supporters say alternative support offered by government to millions of citizens left unemployed and impoverished by the pandemic was insufficient and bureaucratic.
(Reporting by Fabian Cambero and Aislinn Laing; Additional reporting by Natalia Ramos and Dave Sherwood, Editing by Richard Chang and Grant McCool)
