Argentina’s upper house has narrowly passed a controversial bill key to libertarian President Javier Milei’s economic reform plans as thousands of protesters clashed with police in the streets.

Senators voted 37 to 36 late on Wednesday to give provisional approval to the plan, embarking on an all-night marathon sitting, extending into the following day ahead of votes on each article of the package, which includes radical measures on privatisation and tax breaks for investors.

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The Senate had been divided down the middle over the bill, which was eventually decided by a tie-breaking vote from the head of the chamber, Vice President Victoria Villarruel.

“Today, there are two Argentinas,” Villarruel said at the session. “A violent Argentina that sets a car on fire, throws rocks and debates the exercise of democracy, and another Argentina with workers waiting with great pain and sacrifice for the change that they voted for.”

As the senators voted, thousands of protesters poured into the streets, burning cars and throwing Molotov cocktails as hundreds of federal security forces pushed back with rounds of tear gas and water cannon.

Police detain protesters angry over the proposed economic reforms in Buenos Aires [Luis Robayo/AFP]

Seven people, including five lawmakers, were treated at hospital after being pepper-sprayed, according to the Ministry of Health. Dozens of others received medical attention at the scene.

At least 10 people were arrested and nine police officers were injured, according to a spokesman for the Ministry of Security, quoted by the AFP news agency.

‘Anarcho-capitalist’

The vote delivered a major boost to Milei, a self-declared “anarcho-capitalist”, whose efforts to overhaul the government and economy have run into tough resistance in Argentina’s opposition-dominated Congress, which he has dubbed a “nest of rats”.

A political outsider with just two years of experience as a lawmaker, his three-year-old party, Liberty Advances, holds only 15 percent of seats in the lower house and 10 percent in the Senate.

“Tonight is a triumph for the Argentine people and the first step toward the recovery of our greatness,” Milei posted on X, calling his bills “the most ambitious legislative reform of the last 40 years”.

The bill is central to Milei’s plans to overhaul an embattled economy. Executive measures imposed so far, which include slashing subsidies and firing thousands of public sector employees, have deepened a recession, increased poverty to 55 percent and sent annual inflation surging 300 percent.

Right-wing and left-wing lawmakers clashed over various parts of the 238-article reform bill, which includes the declaration of a one-year state of economic emergency allowing Milei to disband federal agencies and the privatisation of about a dozen public companies.

Other measures deal with reducing access to minimum retirement allowances and weakening labour protections – slammed by left-wing opponents as a licence to fire workers.

The provisions also envision tax, customs and foreign exchange incentives to encourage investment in the country racked by economic crisis.

Prior to the bill’s preliminary Senate approval, opposition lawmakers took to the floor claiming it would reverse decades of progress.

Opposition senator Mariano Recalde said the labour reforms in particular “take us back to the last century when the employee had no labour rights”.

The bill was passed by the lower house, the Chamber of Deputies, in April. If approved in a full vote by the Senate, the measure will return to the lower house for a final green light.

The measure is opposed by a broad swath of society, including social organisations, left-wing political parties, retirees, teachers and labour unions.

Protesters fear the bill will leave them further exposed to rising unemployment and consumer prices.

“Argentine people’s lives are at play,” said protester and social leader Luis D’Elia. “This poison has failed several times in Argentina, and we won’t allow this to carry on.”

Miriam Rajovitcher, a 54-year-old teacher, said if the law passed, she would lose many of her labour and pension rights. “I am so much worse off,” she said.