Chile’s government coalition breaks up

Chile's government coalition breaks up

Corona aid is to be financed in Chile through private pension funds. The right disputes. The coalition committee is suspended.

Chile’s right-wing coalition government is on the brink of extinction. “Nothing works with ‘Chile Vamos’,” said President Sebastián Piñera. After some of his MPs refused to follow him during a vote in Congress, the coalition committee was suspended “until further instruction”.

Piñera himself had contributed most to the disobedience. Because he couldn’t get help for the middle class hit by the corona pandemic, the proposal for a strong one-off payment from private pension funds got more and more approval. Contributors should be paid up to ten percent of their previous deposits, according to the proposal, which was brought in by the small left Federación Regionalista Verde Social and some independent members of Congress.

The very fact that the proposal made it onto the agenda of the House of Representatives made one sit up and take notice. When a majority voted for it last Wednesday, all the sirens on the right shrilled. Of the 65 members of the government coalition, 21 had rejected the proposal. 31 abstained, 13 MPs voted in favor. The yes votes came from the two strongest coalition parties. Nine from the right-wing liberal Renovación Nacional (RN) and four from the Pinochett-oriented Unión Demócrata Independiente (UDI), “We have to think about our future and that can mean changes,” said Andrés Molina of the small coalition partner Evópoli after the vote.

Interior Minister Gonzalo Blumel is even threatened with the end of conservative ideals. “We have always criticized that populism belongs to the left, but unfortunately it now seems to have affected our parliamentarians as well.” The renegades should think about leaving the coalition, Blumel demanded.

Instead of demanding withdrawals, the government should think about an improved aid proposal for the middle class, UDI Senator David Sandoval opposed. In the coming days, the Senate will decide on aid from the pension funds. Even if the upper house should vote against the proposal, the president will have to find a new coalition majority.

Private pension funds are a pillar of the neoliberal model laid down in the constitution. During the military dictatorship of Augusto Pinochet, they were set up by his Minister of Labor and Social Affairs, José Piñera, the older brother of President Sebastián Piñera. Six private companies have since managed the funds, into which employees pay ten percent of their gross income every month. There is no state pension insurance.

All attempts at fundamental reform have so far failed. In March 2017, around two million people across the country were against the private pension model that no “decent pensions” produce and contribute to wealth concentration and income inequality. This frustration had also escalated in the social unrest last October.

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