FREE

Uruguay's Governing Coalition Targets Pension Reform After Referendum Win

On March 27, Uruguayan voters narrowly rejected a referendum to repeal 135 articles in the Law of Urgent Consideration (LUC), the omnibus bill that Congress passed in July 2020. As President Lacalle Pou's signature legislation at the start of his administration, the LUC introduced a broad array of reforms, including laws on security, education, and the fiscal framework. The final tally had the "No" camp winning 50% of the vote, with the repeal option garnering 49% of the vote.

Key highlights:

-- On March 27, the referendum to repeal 135 articles of the Law of Urgent Consideration (LUC) was narrowly rejected by Uruguayan voters.
-- The outcome of the referendum means that the key policy changes of Lacalle Pou administration, including the new fiscal framework, will remain in law and reinforce the country's improving fiscal management.
-- However, passing pension reform, the governing coalition's next legislative priority, could be challenging.

“In our view, the outcome of the referendum is positive in that the new fiscal framework will remain enshrined in law and strengthen the country's fiscal institutions,” said Michael Heydt, Senior Vice President, Global Sovereign Ratings. “However, the governing coalition's next legislative objective - passing pension reform - could be a challenging political undertaking.”