While no Latin American government has recognized the new Ecuadorian presidency, Washington and the European Union (EU) each have said that their relations with Ecuador will continue as usual. The Organization of American States (OAS) also struck a conciliatory note, saying that it wishes to help strengthen democracy in Ecuador.

Palacio was installed April 20 by opposition members of Ecuador’s Congress who had organized street protests in the capital, largely comprised of middle class professionals, that forced President Lucio Gutiérrez to flee into exile in Brazil. Palacio was vice president in Gutíerrez’s government.

Gutiérrez had been among “leftist” bourgeois figures elected recently in Latin America. Support for his government among peasants and the country’s large Indian indigenous population fell sharply as Gutiérrez continued austere economic policies prescribed by Wall Street and other imperialist investors. Sensing Gutiérrez’s isolation, opposition leaders in Ecuador’s Congress, who are to the right of Gutiérrez’s government, were able to remove him by mobilizing relatively small protests dominated by Quito’s middle class.

Gutiérrez’s opponents focused on his political maneuvers, charging the government with corruption. Protests against his government increased starting in December when allies in Congress removed 27 of the 31 Supreme Court justices and packed the court with their own candidates. The new court then cleared several politicians in exile of corruption charges, including ex-president Abdalá Bucaram.

“Ecuador will be a nation that respects its commitments without restriction,” Palacio said. “This includes the Manta base. If the Manta base has been conceived as a front against drug trafficking, Ecuador will continue in that struggle.” In 1999, Ecuador’s government signed an agreement allowing the U.S. military use of the Manta Air Base. Gutiérrez, who criticized the agreement in 2000, nevertheless continued it after being elected in 2002. As part of its “war on terrorism” Washington has strengthened its military presence throughout Latin America.

Following a meeting with Palacio, U.S. ambassador to Ecuador Kristie Kenney said, “We never broke relations and we continue to work with the government.” Just prior to a meeting of EU foreign ministers, EU foreign policy chief Javier Solana said, “Until everything is clarified, what we are doing is to recognize the country.”

After three days of meetings with officials in Palacio’s government and opposition groups, members of an OAS special mission said the body would back Ecuador’s efforts to “strengthen democracy,” and brushed aside questions on whether they considered the new government to be constitutional.

The new regime has already shown signs of instability, as Palacio attempts to cobble together a coalition that includes left critics of Gutiérrez’s austerity policies and opponents to the right of the Gutiérrez government. In his first public appearance, new finance minister Rafael Correa said the decision of President Jamil Mahuad in 2000 to adopt the U.S. dollar instead of the sucre as the country‘s currency was the “greatest economic error.” At an exchange rate of 25,000 sucres to one dollar, the measure virtually wiped out meager savings and earnings of millions of Ecuadorians. Correa added, however, that the policy should not be reversed.

Mahuad was driven from office in 2000 when thousands of protesters occupied the parliament. The protests were led by the country’s largest indigenous organization CONAIE (Confederation of Indigenous Nationalities of Ecuador). A short-lived provisional governing triumvirate resulted from the revolt. It consisted of the president of CONAIE; Gutiérrez, then an army colonel; and a former supreme court president. The group ceded power to the military, which then handed the government to Mahuad’s vice president, Gustavo Noboa.

Correa also said that a stabilization fund derived from oil revenues, 70 percent of which is earmarked for debt payments, should be abolished. Palacio said the fund will be restructured to increase social spending.

The new commerce minister, Oswaldo Molestina, implied that Ecuador might abandon negotiations for a multiregional trade pact with the United States, Peru, and Colombia. Correa added that any final deal would have to be put to a referendum. In an effort to allay concerns of foreign investors, Palacio said, “We cannot say whether we will enter into a free trade agreement, but we want to exercise our sovereignty in an open conversation.”

Gutiérrez was elected in 2002 largely on the strength of his association with the popular revolt that had toppled Mahuad two years earlier. Couching his speeches in populist demagogy, Gutiérrez carried out similar policies to those of his predecessors, earning him a reputation among Wall Street bankers as “fiscally responsible.”

Calling himself “the president of the needy,” Gutiérrez insisted as he fled the country that “in Quito and Guayaquil you can hear voices calling for my return, in the Amazon, along the Pacific Coast, and in the poor neighborhoods there are millions of people who support me.” This has proved not to be the case. Gutiérrez’s ouster has met with little opposition. The vast majority of workers, peasants, and indigenous peoples in Ecuador who just four years earlier led mass struggles that toppled the government, did not mobilize to defend him.

“In the beginning he talked about the poor, but then he went to the side of the rich,” said Marta Tigusi, an indigenous street vendor who sells crafts at an artisan market in Quito. “Then we lost trust in him.”  
 
 
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