Ecuador’s electoral authority plans to hold new elections within three months after President Guillermo Lasso took the unprecedented step of dissolving Congress on Wednesday.
(Bloomberg) — Ecuador’s electoral authority plans to hold new elections within three months after President Guillermo Lasso took the unprecedented step of dissolving Congress on Wednesday.
The Andean nation set the tentative date of Aug. 20 for the election of a new president and lawmakers, National Electoral Council’s Vice President Enrique Pita said Thursday in a TV interview. The electoral authority also floated October 15 as a potential date for a presidential runoff vote, if one is needed.
It will likely take until late September until the votes for the electoral authority are tallied. Due to the urgency of the whole procedure, parties will have to speed up the registration of candidates and the electoral roll for February’s local elections will be used again, Pita said. The dates aren’t finalized and could potentially change.
The new officials will only serve until mid-2025, when Lasso’s term would have ended, and the president will govern by decree until they take office.
The nation’s dollar bonds due in 2040 extended losses on Thursday, falling about half a cent to 32.7 cents on the dollar, according to indicative pricing data. The bonds crashed after Lasso’s move, as investors weighed the possibility that allies of socialist former President Rafael Correa could win the upcoming vote.
Army and police chiefs urged the population to remain calm, and there wasn’t any significant unrest in the hours after Lasso’s announcement.
Indigenous organization CONAIE, which led major protests that paralyzed swathes of the economy last year, described Lasso ruling by decree as a “dictatorship scenario.” The group is still debating whether to call fresh protests.
Lasso, a 67-year-old wealthy former banker, is popular with investors but his approval rating among the general public has declined amid a surge in drug-related killings.
Ecuador’s bonds rallied after Lasso was elected in 2021, and he moved to cut the fiscal deficit in a country that has a reputation as a serial defaulter. But that optimism evaporated as political opposition strengthened, and after voters handed him a humiliating defeat in a referendum in February.
The nation’s dollar bonds due 2030 now yield more than 20%, indicating a high level of distress.
Likely Candidates
The dissolution of congress came after opposition lawmakers accused Lasso of embezzlement for failing to cancel a controversial oil shipping contract. He denied the allegations, which he said were politically motivated.
Read more: Ecuador Lawmakers Open Impeachment Trial of President Lasso
He will now try to recover his popularity through a series of decrees that will be overseen by the country’s constitutional court. In his first move after dissolving congress, he signed into law a bill that increases tax deductions for families and tweaks them for small companies.
“Even with an exhausted political capital, Lasso could shore up some support if he plays his cards right in the next three months,” said Santiago Resico, Latin America strategist at TPCG Valores, a Buenos Aires-based brokerage house.
The president has said he will run again. Other likely candidates include former independent lawmaker Fernando Villavicencio, an investigative journalist, and environmentalist Yaku Perez, who Lasso edged out in the first round of the 2021 election.
–With assistance from Carolina Gonzalez and Maria Elena Vizcaino.
(Adds additional comment from electoral body’s vice president.)
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