QUITO, May 17 (Reuters) - Ecuador's President Guillermo Lasso dissolved the National Assembly in a decree on Wednesday, bringing forward legislative and presidential elections, a day after he presented his defense in an impeachment process against him.
Lasso denies the accusation, saying his administration made changes to the contract signed years before he took office, in order to benefit the state, on advice from Ecuador's comptroller.
A majority of lawmakers backed a resolution saying Lasso allowed the corrupt contract to continue, even though 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 invoked the 'two-way death' 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, adding that the government will issue laws by decree "without obstacles".
Lasso decreed a tax reform in the same broadcast, which he said would lower taxes for Ecuadoreans.
Ecuador's military and police "have and will hold their absolute respect for the constitution and law," Nelson Proano, commander of Ecuador's armed forces, said a video statement, adding that Lasso's decision to dissolve the assembly was enshrined under the constitution.
Police and members of the military surrounded the National Assembly building, allowing no one inside, according to a Reuters witness.
Ninety-two votes from the 137-member legislature would have been needed to remove Lasso from office. The vote to continue the process received 88.
The country's constitution enshrines the so-called 'two-way death' - allowing Lasso 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.
Lasso will now remain in office and rule by decree, while national electoral authorities set the date for the elections.
Ecuador's electoral court must decide on a date for new elections within seven days of the assembly's dissolution.
Some lawmakers have said any dissolution would be unconstitutional and that they would refuse to comply.
Ecuador's largest Indigenous organization, CONAIE, said in a message shared via Twitter that Lasso's decision constituted a "dictatorship," adding it would hold an "extraordinary extended council" to analyze the situation.
Last year CONAIE led protests throughout Ecuador that almost unseated Lasso.
Those voted into power in the early elections would only serve until the regularly-scheduled 2025 elections take place.
Lawmakers from the party of ex-President Rafael Correa - himself convicted of corruption - have led the impeachment charge and had pledge their 47 votes for removal.
The impeachment process was the first against a Ecuadorean president in decades.
