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Explainer-Ecuador's Lasso dissolved the legislature. What comes next?

QUITO (Reuters) - Ecuador's President Guillermo Lasso dissolved the National Assembly by decree on Wednesday, bringing forward legislative and presidential elections, a day after he defended himself in an impeachment hearing.

WHAT IS PRESIDENT LASSO ACCUSED OF?

Lasso is accused of disregarding warnings over alleged embezzlement related to a oil shipping contract signed in 2018 between public company Flopec and a private sector business.

Lasso, a former banker who took power in 2021, has denied the charges and says they are politically motivated. He has repeatedly stressed the contract was signed years before he took office and that his administration made changes to it on advice from Ecuador's comptroller to benefit the state.

The opposition argues that Lasso and Hernan Luque - the former chairman of the board of the umbrella organization of state companies, who is now a fugitive - allowed the contract to continue even though it benefited third parties at the state's expense.

WHAT HAPPENED THIS WEEK?

Ecuador's National Assembly began an impeachment hearing against Lasso on Tuesday, following a vote on May 9 to move forward in the process against him, which was passed with 88 votes from the 116 legislators present.

The impeachment process continued although a report from the National Assembly's oversight committee found there was no cause for his trial or removal. The report was not supported by five of the committee's nine members.

Two opposition lawmakers presented the case against Lasso on Tuesday. The president then gave his own defense before the assembly.

His opponents had "created a fictitious situation that doesn't solve the problems of the country or anyone else," Lasso said in his defense.

HOW CAN LASSO DISSOLVE THE LEGISLATURE?

Ecuador's constitution includes a provision that allows the president to implement a so-called "two-way death," calling elections for both his post and the assembly under certain circumstances, including if actions by the legislature are blocking the functioning of government.

Lasso invoked the "two-way death" on Wednesday, citing Ecuador's grave political crisis.

"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.

WHAT HAPPENS NEXT?

According to the constitution, Lasso will now remain in office and rule by decree, and Ecuador's electoral court must decide on a date for new elections within seven days of the assembly's dissolution.

Those elected in new voting would only serve until 2025, when elections would return to their regular schedule.

CONAIE, Ecuador's largest Indigenous organization, says it will call an "extraordinary" council to discuss the matter and blasted Lasso's decision as dictatorial. It has previously led widespread protests against Lasso.

The military and police have pledged to uphold the constitution and the law, and say that Lasso's decision to dissolve the legislature and call elections is enshrined in Ecuador's constitution.

A number of opposition politicians have decried the president's decision as unconstitutional.

(Reporting by Oliver Griffin, Editing by Rosalba O'Brien)