By Nicolás Misculin and Eliana Raszewski
BUENOS AIRES (Reuters) -Argentina's Senate passed a sprawling bill on Wednesday that is key to libertarian President Javier Milei's economic reform plans, while protesters set fires and clashed with police in the streets outside Congress.
The upper house was divided down the middle over the bill, which was passed in a general vote after the head of the chamber, Vice President Victoria Villarruel, broke the 36-36 tie.
The bill passed after a marathon debate, with senators now set to vote on each article of the package designed to boost investment by privatizing state entities and providing incentives for businesses.
The bill initially passed the lower house of deputies in April, but will now head back for another vote following changes in the Senate.
"Today there are two Argentinas," Villarruel said as she voted in favor of the reform. "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."
Milei's government, which controls only a minority of seats in both chambers, had been bargaining to win over allies. It knew the bill would face changes, but had been hoping to at least eke out the general approval.
The main left-leaning Peronist opposition bloc, closely allied to the unions, had voted down what is known as the "bases" bill, with voting still pending on a separate fiscal package.
The bill is key to Milei's plans to overhaul an embattled economy, with inflation near 300%, and includes plans for privatizing public firms, granting special powers to the president and spurring investment.
But some protestors fear it would leave them further exposed to rising unemployment and consumer prices.
"Argentine people's lives are at play. We've drunk this poison several times: to have zero inflation with zero economic activity," protester and social leader Luis D'Elia said as thousands protested the planned reforms.
"This poison has failed several times in Argentina and we won't allow this to carry on."
Reuters footage from the streets of Buenos Aires showed a car ablaze, with scattered protesters throwing rocks and bottles, while police with riot gear used tear gas, water hoses and rubber bullets.
Milei's office celebrated the bill's passage.
"What happened tonight is a triumph for the Argentine people and the first step to recovering our greatness," the presidential office said in a statement.
'CHANGE ARGENTINA'
Milei, a brash economist and former pundit who has clashed with lawmakers and regularly called Congress a "nest of rats," has tied a lot to the bill. His government says it is key to undoing a major economic crisis that it inherited.
"We are going to change Argentina. We'll make a liberal Argentina," Milei said on Wednesday, adding that if his reforms didn't get through Congress now he'd try again in 2025.
A government official speaking on condition of anonymity said that they expected the bill to get the Senate's general approval, but that it would be "more altered than we would like."
The passage of the "bases" bill will "accelerate the growth process, mainly by getting investment into the country," the person said.
Argentina has annual inflation near 300%, myriad capital controls that stymie business and trade, depleted foreign currency reserves and a high debt load that needs servicing. The economy is in recession and poverty is rising.