Paraguay’s President Santiago Peña has been removed from office and placed under house arrest after a banking collapse triggered a financial crisis that left more than half of the country’s population without access to their accounts. Peña was arrested on Friday, minutes after lawmakers, including members of his own party, voted unanimously to remove him from office. This followed the collapse at the beginning of the week of Ueno Bank, which had ties to his private business interests.
Peña had offered his resignation on Thursday, but instead of accepting it, senators dismissed him and charged him with misconduct. This means he has been stripped of the immunity normally granted to former presidents. The impeachment charges that led to Peña’s removal alleged that he had conflicts of interest, had manipulated regulatory oversight, had diverted pension funds and had taken part in an institutional cover-up involving the central bank. Peña, who until last year held shares in the bank’s parent company, has denied any wrongdoing.
Prosecutor Silvia Margarita Gonzalez Vester said Peña is expected to be questioned on Saturday about charges of breach of trust, influence peddling and embezzlement of funds. Meanwhile, Peña’s deputy, Pedro Alliana, has been sworn in as the new interim president and has promised not to “abandon” the millions of people affected by the scandal. Alliana, who will serve as president until 2028, stressed that “compatriots who are going through a difficult time as a result of the financial collapse will be fully compensated”.
The collapse of the digital bank left more than half of Paraguay’s population without access to their savings after it was seized by the country’s central bank. Long queues of people trying to withdraw money from Ueno branches stretched along the streets of the capital, Asunción, on Tuesday and Wednesday. Around three million depositors remain unable to access their savings and pensions, sparking public anger, especially in the capital.
In response to the situation, protests broke out across the country, with thousands of people taking to the streets on Thursday to demand their money. Earlier demonstrations were accompanied by clashes with police, who used tear gas and water cannons against the crowds. The vote to remove Peña passed with 44 of 45 senators voting in favour, while one lawmaker was absent.
In a video posted on X announcing his resignation, Peña said: “It has never been my intention to betray the trust you have placed in me”, adding that his priority was “the peace of mind of Paraguayans who entrusted their savings to our financial system”. After the vote, Senate President Basilio Núñez said Peña was found guilty of “neglect of duty”. Senator Rafael Filizzola described the situation as “the biggest corruption scandal in our democratic history – a terrible blow to the state, to private citizens, and to the credibility and image of the country”. Analysts predict that Peña is likely to face criminal prosecution over the bank’s collapse, while his defence lawyer, Ricardo Preda, described the charges as “reckless” and “irresponsible and opportunistic”.
Taken from BBC News