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Ecuador president Lasso dissolves National Assembly, triggers early elections

By Alexandra Valencia

QUITO (Reuters) -Ecuador's President Guillermo Lasso dissolved the National Assembly by decree on Wednesday, bringing forward legislative and presidential elections and heading off an attempt by opposition politicians to impeach him.

Police and military decked in riot gear guarded the National Assembly building from behind barricades in capital Quito, allowing no one inside.

Opposition politicians wanted to impeach Lasso over accusations he disregarded warnings of embezzlement related to a contract at state-owned oil transportation company Flopec, charges the president denies.

A majority of lawmakers had backed a resolution accusing Lasso of allowing the corrupt contract to continue after taking office in 2021, although a congressional oversight committee, which heard testimony from opposition lawmakers, officials, and Lasso's lawyer, said in its report it did not recommend impeachment.

Lasso says the impeachment process - the first against an Ecuadorean president in decades - is politically motivated and has sparked a grave crisis that has threatened democracy. The dissolution was necessary, he said.

"This is a democratic decision, not only because it is constitutional, but because it returns the power to the Ecuadorean people ... to decide their future in the next elections," Lasso said in a video broadcast.

The turmoil in Ecuador is the latest episode of volatility in a region that saw Peru's former President Pedro Castillo removed from office in a December impeachment trial and arrested after attempting to dissolve Congress.

Ecuador sovereign bond prices tumbled on the news, which spooked investors with worries over increased uncertainty and fears the market-friendly Lasso could be replaced.

Lasso's decision prompted an outcry from Indigenous and leftist groups - some of who said they would take the matter to the streets in protest - while opposition politicians questioned the legality of the move.

Citing the crisis and inability to govern, Lasso invoked the constitution's so-called "two-way death" provision, which allows the president to call elections for both his post and the assembly under certain circumstances, including if actions by the legislature are blocking the functioning of government.

According to the constitution, he will now remain in office and rule by decree.

Ecuador's electoral court has until May 24 to call new elections, which must take place within 90 days, Diana Ataimaint, the court's president, told journalists, adding that Lasso is free to run.

Those voted into power in the early elections would serve until the regularly-scheduled 2025 elections take place.

ARMED FORCES 'UPHOLD CONSTITUTION'

Ecuador's military and police "have and will uphold their absolute respect for the constitution and law," Nelson Proano, commander of Ecuador's armed forces, said in a video statement, adding that Lasso's decision to dissolve the assembly was enshrined under the constitution.

The Ecuador Business Committee, which includes most of the country's industry associations, in a statement said the dissolution was constitutional and called for calm.

Opposition lawmakers called the dissolution illegal, though some belonging to the party of ex-President Rafael Correa - who was convicted of corruption and is living in exile - said elections were the only way out of the crisis.

Some opposition politicians presented a motion to the country's top court in a bid to block the dissolution.

Virgilio Saquicela, the former president of the National Assembly who was re-elected to the post just last week and had allowed the impeachment process to go ahead, demanded Ecuador's top court immediately rule on demands brought by opposition politicians to block the dissolution.

"We demand the Constitutional Court act, they are the guarantors of the constitution, they are the ones that have to resolve (the matter)," he told journalists, adding Lasso had "tampered" with the country's constitution.

Leonidas Iza, president of Ecuador's largest Indigenous organization, CONAIE, said in a video message that Lasso's decision was "dictatorial," adding that CONAIE had called a meeting to analyze the situation.

"We call on all of Ecuador to be vigilant and reject another undemocratic act by Lasso and his ministers, which is intended to violate the democratic order," Iza said in a video message broadcast via social media.

Last year, CONAIE led protests throughout Ecuador that almost unseated Lasso.

Lasso has repeatedly stressed the Flopec contract he is accused of turning a blind eye to was signed years before he took office and that his administration made changes to the contract on advice from Ecuador's comptroller to benefit the state.

Ninety-two votes out of 137 in the National Assembly would have been needed to impeach Lasso. A vote to move forward with the process last week received 88 votes out of 116 legislators present.

(Reporting by Alexandra ValenciaAdditional reporting by Karen Toro in Quito; Writing by Oliver Griffin and Julia Symmes Cobb; Editing by Christina Fincher, Rosalba O'Brien and Sonali Paul)