March 15, 1999
Web posted at: 12:31 p.m. EDT (1231 GMT)

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QUITO, Ecuador (CNN) -- Long lines of people waited to make withdrawals Monday morning, as Ecuador's banks opened after a week-long shutdown ordered to stave off a financial meltdown.

While the lines were mostly orderly, chaos reigned on the streets of Quito, as taxi drivers blocked main roads with burning tires to protest a 165 percent hike in fuel prices imposed by the cash-strapped government.

In an attempt to stave off what the government has called Ecuador's worst economic crisis in 50 years, President Jamil Mahuad closed the financial institutions down for all of last week, and also announced the fuel price increase and other austerity measures.

"We all knew something radical had to be done to save the economy, but now that it's here it's scary," said accountant Mario Ramirez, who was waiting in line at Quito's Banco Pichincha. "What is going to happen to Ecuador?"

Mahuad, a Harvard-educated lawyer, ordered the banks closed to stem massive withdrawals by depositors no longer confident with the country's financial security.

Anticipating further runs on the banks when they reopened, Mahuad on Thursday froze about half of the $8.6 billion on deposit in the country.

"I have $5,000 in my bank account and I can't touch it for a year," said shop owner Raul Flores. "They've stolen my money."

Taxi drivers blocked main roads in Quito on Monday to protest a rise in fuel prices

Backlash to harsh measures

After Mahuad announced the measures, his popularity plunged to 16 percent, compared with 50 percent in January.

Mahuad, who is Ecuador's fourth president in three years, also declared a 60-day state of emergency, giving him power to use troops to guard industry and banks during any protests.

Unions angered by Mahuad's moves have called for protests and bank occupations to be held on Wednesday. And some legislators in Congress, where Mahuad's centrist Popular Democracy party does not have a majority, have vowed to veto many of the measures.

A two-day national strike against the austerity measures last week closed stores and transportation, costing businesses $120 million, but was largely peaceful.

Ecuador's economic crisis was spurred by El Nino floods, which did $2.6 billion in damage, and low prices for oil, the country's main export.

Mahuad ascended to the presidency last August, pledging to restore stability to Ecuador's economy.

Reuters contributed to this report.

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