Chilean President Sebastian Pinera bowed to extreme public pressure on Thursday and decided to sign a contentious bill enabling people to withdraw 10% of their pensions early in the coronavirus pandemic. Yet after a strong contingent of Pinera’s ruling coalition lawmakers helped the bill win a two-thirds majority in Congress on Thursday, the president said he would waive his right to veto the change and sign it into law on Friday.
“The president’s decision to enact this constitutional reform is due to his intention and will – given the difficult economic and social situation experienced by many families and compatriots – to facilitate and expedite the withdrawal of these pension savings funds,” the government said in a statement. Cristobal Bellolio, a political scientist, said the bill embodied Chile’s “Brexit Moment,” a symbolic blow to the government, against expert advice, of an angry electorate emboldened by social demonstrations that broke out in October last year against injustice and state policies, like the AFP framework.
Economists and policymakers have warned that withdrawing from pension funds would reduce already low average payments and shake the stock, bond and currency markets. Supporters of the bill argue that the alternative assistance provided by the government to millions of people left unemployed and poor by the pandemic was inadequate and bureaucratic.