Ecuador’s President Guillermo Lasso said he’ll dissolve congress if he faces removal in the current impeachment trial, escalating a political fight with opposition lawmakers.
(Bloomberg) — Ecuador’s President Guillermo Lasso said he’ll dissolve congress if he faces removal in the current impeachment trial, escalating a political fight with opposition lawmakers.
Lasso, who has pledged to defend himself before the plenary against what he says are bogus embezzlement charges, told the Financial Times in an interview that he still thinks he could win over enough lawmakers to block the opposition’s attempt to remove him from office. However, this is a less likely scenario, he said.
Ecuador bonds were among the worst performers in emerging markets on Tuesday after Lasso’s comments. Notes due in 2030 dropped 1 cent to 48 cents on the dollar, according to indicative pricing compiled by Bloomberg.
Dissolving congress is one of the constitutional tools the business-friendly leader still has to prevent the opposition from mustering the 92 votes needed to replace him with Vice President Alfredo Borrero. If Lasso were to pick this path, he would trigger early elections while governing by decree in the interim, pending reviews by the Constitutional Court. In that case, he would seek election again, Lasso said.
Read More: Ecuador President Calls Impeachment a ‘Desperate’ Grab For Power
Lasso survived a first impeachment attempt in June amid violent protests from Indigenous groups, with the opposition falling short of the threshold and only obtaining 80 votes. He is now being accused by the leftist opposition of corruption related to a contract of state oil shipping company Flopec.
Political instability has sent Ecuador’s bonds into a tailspin and left them deep in distressed territory.
“The market move seems overdone” even in light of Lasso’s announcement, however, as Ecuador’s payment schedule is light until 2025, said JPMorgan Chase & Co. analysts Gorka Lalaguna, Lucila Barbeito and Ben Ramsey in a research note.
The losses have been so great that JPMorgan shifted to overweight on Ecuador for the first time since downgrading it to market weight last June.
–With assistance from Zijia Song, Ezra Fieser and Maria Elena Vizcaino.
(Adds analyst comment in seventh, eighth paragraphs)
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