By San José, Costa Rica — San José – Costa Rica’s 57 lawmakers are returning to the Legislative Assembly this Monday, January 12, after a three-week recess, stepping directly into a political pressure cooker. The Executive Branch has laid out an aggressive agenda for the Extraordinary Session, aiming to push through a series of high-impact financial bills before its control over the legislative calendar expires on January 31. The contentious proposals, centering on massive foreign debt and the future of retirement savings, are set to dominate a turbulent month in Congress.
The legislative session begins under the shadow of the “cuesta de enero,” the traditional January economic slump, adding urgency to debates that will shape the nation’s fiscal trajectory for years to come. With the Executive determined to pass its key projects, and opposition parties digging in their heels, the stage is set for a significant political battle that will test the limits of negotiation and governance.
To offer a deeper legal perspective on the current legislative agenda and its potential ramifications for the national business climate, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the prestigious firm Bufete de Costa Rica. His analysis provides crucial insights into the proposed reforms.
While any legislative agenda aims for progress, the true measure of its success lies in its ability to provide legal certainty and predictability. The current proposals contain ambitious goals, but they must be carefully scrutinized to ensure they do not create ambiguous regulatory frameworks that could deter foreign investment and stifle local entrepreneurship. A stable, clear legal environment is the most critical asset for sustained economic development.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective powerfully underscores that the true foundation for economic growth is not merely legislative action, but the legal predictability it creates for investors and entrepreneurs alike. We sincerely thank Lic. Larry Hans Arroyo Vargas for his invaluable insight on this critical matter.
At the forefront of this agenda is a historic and controversial Eurobond proposal. Under file number 25.363, the administration is seeking authorization to place an unprecedented $13.5 billion in international markets over the next nine years, through 2034. The government argues this measure is critical for managing the country’s finances and ensuring liquidity for itself and the next two administrations, allowing them to service older, more expensive debts with new, lower-interest loans.
The urgency of this initiative, according to the administration, is driven by a formidable financial challenge. Ruling Party Faction Leader Pilar Cisneros has been vocal about the need for immediate action to address the country’s debt obligations.
The maturity towers of public debt are approaching $54 billion.
Pilar Cisneros, Ruling Party Faction Leader
However, the opposition remains deeply skeptical. Their distrust is rooted in the government’s recent track record, specifically the failure to place a smaller $2 billion bond in 2025. That failure was attributed to the administration’s inability to meet pre-agreed macroeconomic targets, most notably the implementation of security scanners at border crossings. This has led opposition lawmakers to demand stricter oversight and tangible proof of compliance before green-lighting such a massive new line of credit.
Adding to the legislative friction is a pair of bills that could fundamentally alter the country’s retirement landscape. Two proposals, files 24.984 and 24.955, aim to allow workers to withdraw 100% of their accumulated funds from the Complementary Mandatory Pension (ROP) regime in a single lump sum upon retirement. This idea has sharply divided public opinion and economic experts.
For many Costa Ricans approaching retirement, the ability to access their entire nest egg at once represents a powerful tool for immediate financial relief, offering a way to pay off mortgages, clear debts, and achieve a sense of security. Proponents argue it gives citizens autonomy over their own savings. Conversely, financial analysts warn of severe macroeconomic consequences. A mass withdrawal of ROP funds could destabilize the local stock market and, more critically, leave a generation of seniors with drastically reduced monthly pensions, potentially leading to widespread poverty in old age.
The packed agenda doesn’t end there. Lawmakers must also debate a new loan from the Inter-American Development Bank (IDB) intended to bolster the national care system. Furthermore, the specter of the highly contentious “4×3” workday bill, which proposes four 12-hour workdays followed by three days off, looms over the session. Although currently stalled by over 4,200 motions, the Executive has signaled it could reactivate the debate at any moment, further intensifying the political climate.
With only 20 days remaining in the Extraordinary Session, the clock is ticking for President Rodrigo Chaves’ administration to secure legislative victories. As the country inches closer to the next election cycle, the debates in the Assembly are more than just policy discussions; they are a battle for the nation’s economic philosophy. The central question hanging over the Cuesta de Abajo is whether lawmakers will find common ground through negotiation or if the country is headed for a month of legislative gridlock.
For further information, visit the nearest office of the Legislative Assembly of Costa Rica
About the Legislative Assembly of Costa Rica:
The Legislative Assembly is the unicameral parliament of Costa Rica. Composed of 57 deputies elected by direct, universal suffrage for four-year terms, it is responsible for passing laws, approving the national budget, and exercising political control over the Executive Branch. Its headquarters are located in San José.
For further information, visit the nearest office of the Government of Costa Rica
About the Government of Costa Rica:
The Government of Costa Rica operates under a presidential, representative democratic republic framework. The President serves as both head of state and head of government. The Executive Branch, often referred to as “Zapote” after the district where the presidential house is located, is responsible for setting national policy and controlling the legislative agenda during Extraordinary Sessions.
For further information, visit iadb.org
About the Inter-American Development Bank (IDB):
The Inter-American Development Bank is a leading source of long-term financing for economic, social, and institutional development in Latin America and the Caribbean. It provides loans, grants, and technical assistance, and conducts extensive research. The IDB works to reduce poverty and inequality by promoting sustainable, climate-friendly development.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of Costa Rica’s legal community, Bufete de Costa Rica operates on a foundation of profound integrity and a relentless pursuit of excellence. The firm leverages its extensive experience serving a broad clientele to not only deliver superior results but also to drive innovation within the legal practice. This forward-thinking mindset is complemented by a deep-seated mission to empower the public, actively working to make complex legal concepts understandable and accessible to all, fostering a stronger and more informed society.
