* Correa wants to raise cash handout for the poor
* Leftist leader favorite to win Feb. election
By Eduardo Garcia
QUITO, Nov 20 Ecuador lawmakers on Tuesday
approved hiking bank taxes to finance cash payments to the poor,
a move that could cement President Rafael Correa's chances of
winning re-election, but which banks have described as a
Correa, the clear favorite to win the February vote, has
broad popular support thanks to anti-poverty initiatives and a
leftist platform of boosting state involvement in the economy.
"They will continue earning, a bit less, but they will
continue earning," Correa told reporters after the law was
Opposition critics slam the measure as a jab at
banker-turned-politician Guillermo Lasso, who has launched a bid
for the presidency and is the most popular opposition candidate.
"He took a visceral decision to get back at me, a personal
move against someone who was faster than him and thought about
the poor," Lasso told the local daily Expreso on Sunday.
The measure would finance a raise in a monthly stipend paid
to about 2 million low-income citizens including the elderly and
single mothers to $50 from $35 currently.
The government would raise around $165 million through
several tax increases, including a new 3 percent tax on bank
revenue and the elimination of a tax exemption so that banks
will have to pay 23 percent income tax rather than 13 percent.
The law will go into effect once it has been published in
the official gazette, but officials did not give a publication
Lasso in September offered to raise the stipend, known as
the Human Development Bonus, if he wins office. But Correa
picked up on the idea and sent a bill to Congress to make banks
pay for the increase.
"I spoke about the (possible) ways to finance it, and
instead of engaging in a debate the president and candidate made
a revenge law," Lasso said.
Lasso's proposal was seen as an attempt to dent Correa's
support among the poor. The former banker is running on a
platform of lower taxes and incentives to private investors to
boost job creation.
A survey by local pollster Cedatos released on Monday
forecast Correa would win 52 percent of the vote, followed by
Lasso with 21 percent.
A new term in office would allow Correa, an ally of
Venezuela's socialist leader Hugo Chavez, to continue spending
heavily on the poor and probably give the state a bigger role in
AT WAR WITH BANKS
Correa, 49, has been at loggerheads with the banks since he
first took office in 2007, but his attacks against the financial
sector have become more frequent and caustic in recent weeks.
"They don't care about people. They care about their
pockets. They're manipulating people. This is a strategy of
terror. They want to scare people away from the government to
put their candidate in office," Correa told reporters on Monday.
Bankers have complained that the tax increase amounts to a
de facto confiscation. The banking chamber has said banks will
have less money to grant loans, which could dampen economic
growth in the OPEC-member country.
Correa, a U.S.-trained economist, blames banks for the
hyperinflation and devaluation in 1999 that forced Ecuador to
adopt the dollar as the national currency the following year and
meant thousands of account holders lost part of their savings.
Correa's government has banned banks from investing in other
sectors, a measure approved by a majority of voters in a 2011
referendum. And his government has implemented reforms that ban
financial institutions from charging for some services to
account and credit card holders.
Government regulations also force banks to acquire public
debt and Congress passed a mortgage law earlier this year that
allows borrowers to default on loans by giving back the houses
or cars they bought to the banks that lent them the money.
(Additional reporting by Patricio Vivas; Editing by Lisa