SANTIAGO – As a mandatory quarantine seems more possible, President Sebastián Piñera has taken drastic measures to prepare the national economy. Among them, is the implementation of the “Constitutional 2%.” This allows the president to give payments without authorization from the legislative power.
On Thursday, Mar. 19, President Sebastián Piñera announced that he would be implementing the “Constitutional 2%,” which would allow the executive power to use fiscal money in order to pay for services that are deemed indispensable for the country.
This power is found in article 32 of the current Chilean Constitution and it is a part of the Economical Emergency decree that was added in 2007. It is called the “Constitutional 2%,” because it allows the president to pay directly for indispensable services as long as it doesn’t exceed 2% of the total budget. In order to make these payments, Piñera only needs approval from his ministries to circumvent Congress.
This will be an extra measure that will reinforce the already-announced economy-strengthening measures, which include about US$11 billion, about 4.7% of the national GDP. The Ministry of Finance, Ignacio Briones, explained that this money will supplement the public health budget.
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Prepping for the Virus
The Minister of Finance also announced additional bills to minimize the economic impacts of the pandemic. These include:
- Labor wages protection – This bill would ensure that those employees who can’t work from home will have their job back once they are allowed to go outside. This will also ensure that they continue receiving a paycheck during the quarantine, with the money being paid from the unemployment benefit funds. The only way that this protection will work is if there is a mutual agreement with the employer and when the government orders a quarantine.
- Job protection – This will allow employees to work fewer hours, and receive the same payment as before. The difference is paid from the unemployment benefit funds.
- COVID-19 Bond – This will help those who work at informal jobs.
- Emergency funds – This will create a special emergency fund which will be given to municipalities in case of an emergency related to micro-commerce.
- Postponing Taxes – This will postpone taxes for three months, to ease financial stress on companies in the coming months.
Diego Rivera is currently a senior in University, finishing up his audiovisual degree. You can find him on Twitter as @Piover45.