October 2, 2010 / 9:48 PM / in 8 years

Ecuador's Correa backs off dissolving Congress

QUITO (Reuters) - Ecuadorean President Rafael Correa has backed off the idea of dissolving Congress and ruling by decree and plans to revise an austerity law that triggered a bloody police revolt, a government minister said on Saturday.

Military officers stand guard on the streets of Quito October 2, 2010. REUTERS/Guillermo Granja

On Thursday, as unrest flared across the country, Correa said he might dissolve Congress, which would have meant a call for new elections, seen as a tactic to bypass a deadlocked legislature and try to solidify his power.

“This measure is not part of the immediate scenario,” Policy Minister Doris Soliz told Reuters in an interview.

Soliz added the government planned to rewrite the austerity law to clarify it, rather than make any major changes. She did not rule out using decree powers if the Congress continued to block laws. “The option is there, it has no expiry date.”

Shoppers flocked to Quito’s colonial centre on Saturday as life returned to normal. But heavily armed troops bolstered security in and outside the presidential palace after the police uprising threatened to end nearly five years of relative stability in Ecuador.

Correa vowed on Saturday to round up and punish renegade police who staged the short-lived rebellion, and will investigate opponents he accuses of trying to mount a coup.

The police were angered by moves to cut bonuses and freeze promotions as part of nationwide spending cuts that Correa is trying to push through during a financial squeeze. The law takes effect on Monday.

The rebellion was the toughest challenge yet to the leftist Correa, who remains popular for his anti-poverty programs despite a slow recovery from economic crisis in OPEC’s lowest- producing member nation and the world’s biggest banana exporter.

‘CRAZY PEOPLE’

“We were ambushed, it was a political trap,” Correa said during his weekly address on state television on Saturday, speaking over footage that showed him being physically attacked by police and engulfed in clouds of tear gas.

“These crazy people were politically manipulated. They wanted to kill me,” said Correa, limping with a cane after knee surgery earlier this month. He said one policeman tried to break his already hobbled knee with a truncheon during the mayhem, instead breaking the ankle of a guard who intervened.

After being assaulted, Correa was trapped for hours inside a hospital on Thursday afternoon with police surrounding the building, a standoff that ended when troops rescued him in a night raid.

On his show on Saturday, Correa showed TV images of the rescue operation with troops crawling across the ground as volleys of gunfire tracers streaked across the night sky.

“We have to investigate to the very bottom of this,” he said. “We will identify a lot of people (from the video).”

Eight people were killed in unrest across the country. They included an elite guard who was holding onto the side of Correa’s vehicle when it was strafed by bullets as Correa was driven from the hospital during the rescue operation.

Correa held a minute’s silence in honour of those slain, and after recounting Thursday’s events, turned to economic policies of the past week.

He made a direct appeal to public employees such as police, soldiers and firefighters to focus on the fact their base pay had risen under his administration, rather than on cuts to bonuses and benefits.

Many Ecuadoreans interviewed by Reuters want him to reach out to his opponents to clear uncertainty that may hamper investment, which slowed after Correa defaulted on $3.2 billion (2 billion pounds) in global bonds in 2008.

“Dialogue is the solution. All sides are to blame. This has been very bad for the country’s image.” said Carlos Arce, 24, a creative designer in Guayaquil, Ecuador’s second biggest city. “Whatever will people think? Investors will distance themselves.”

Additional reporting by Hugh Bronstein and Enrique Pretel in Quito; Writing by Simon Gardner; Editing by Peter Cooney

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