"On April 20, 2005, President Lucio Gutierrez was removed from office by Ecuador's Congress following weeks of popular protests. Ecuadorians rejected Gutierrez's December 2004 replacement of the majority of the judges on the country's three highest courts with his political allies, a move that had been sharply criticized by the international community. Succeeding him as President was his former vice president, Alfredo Palacio, a physician and political independent. Palacio is the country's seventh president in nine years. Ecuador's economy is currently expanding because of high oil prices, but its political institutions are extremely fragile. The Palacio Administration has already been weakened by cabinet resignations, allegations of corruption, and a failure to gain congressional support for a constituent assembly. Ecuador continues to work with the United States on counter-narcotics matters and is expected to soon resume negotiations for a U.S.-Andean Free Trade Agreement. Despite this cooperation, investors are concerned by Palacio's lack of fiscal discipline, including his support of a congressional measure to channel oil revenue into social spending rather then debt repayment. This report will be updated periodically."
CRS Report for Congress, RS21687