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Correa wants Ecuador overhaul after referendum win

QUITO (Reuters) - President Rafael Correa said he wanted a radical overhaul of Ecuadorean politics after he overwhelmingly won a referendum that should enable him to wrest power from a Congress reviled as corrupt.

In this file photo, Ecuador's President Rafael Correa waves to people along the streets of Banos, April 13, 2007. Correa is expected to bloody the noses of the Andean state's political elite on Sunday by winning a referendum that could enable him to wrestle power from a reviled Congress. REUTERS/Guillermo Granja

With 19 percent of ballots counted, 83 percent of voters backed Correa’s call for an assembly to rewrite the constitution and strip powers from a Congress they see as tainted for appointing cronies to state firms and the courts.

“This assembly with broad powers could reform the legislative, judicial and even the executive branch,” Correa, a leftist and friend of Venezuelan President Hugo Chavez, said.

“Lets move ahead with this assembly to have a real representative democracy,” he said.

Popular for confronting political elites, Correa wants the new body to make lawmakers spend more time in their small constituencies and to weaken traditional parties that have been pivotal in ousting three presidents in the past decade.

Economists predict investors will welcome Correa’s win. It could defuse the political confrontation and push Ecuadorean bond prices higher on Monday because the president is expected to feel less pressure to implement radical policies such as slashing debt payments to maintain his approval ratings.

But the opposition fears Correa could become too powerful, centralizing government around himself as Chavez has done in Venezuela.

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Still, Ecuador’s unstable political landscape could again change when another election is held to select 130 members for the assembly around September. Old foes of Correa such as former President Lucio Gutierrez could get a strong foothold.

“I will defeat him in the assembly,” he said on Ecuadorean television.

The referendum exposed political fault lines in the world’s largest banana exporter. More than half of Ecuador’s congressmen were fired last month after opposing Correa’s plans for the referendum.

The clear referendum win is expected to bolster Correa’s mandate and allow him to push ahead with initiatives such as ending the lease on a major U.S. military base, renegotiating oil deals and restructuring the national debt.

“Correa and the new constituent legislators (have) a very strong mandate for change and to go far and deep in terms of the scope for the reforms,” Alberto Ramos, a senior economist at Goldman Sachs, wrote in a research note from New York.