Paraguay’s President Pedro Alliana said on Tuesday that the return of pension funds deposited at Ueno Bank will be a priority for his government. The intervention at this financial institution has put at risk around $800 million (approximately 716 million euros) belonging to public bodies. This includes resources from five pension funds. The situation triggered a political crisis that ended with the removal of Santiago Peña from office.
Among the affected institutions is the Social Security Institute (IPS), which manages pensions and part of the country’s health services. Uncertainty over the return of these funds has caused growing concern among workers and pensioners.
Ueno Bank and pension funds at the center of the crisis
Alliana, who took office last Friday, has pledged to protect citizens’ savings and speed up compensation after the banking collapse. He said that around 1.74 million depositors have received payments totaling $330 million through the Deposit Guarantee Fund. The government plans to complete the remaining reimbursements provided for by the emergency legislation approved by Congress by Wednesday, November 11.
However, the payments do not guarantee that all clients will recover all of their savings. The guarantee scheme covers up to around $38,600 (approximately 34,575 euros) per depositor. Initial advances are limited to around $20,000. For many of those affected, the return of money represents a first relief after several days of uncertainty. “They finally transferred the money I was missing,” said Rosario, a 45-year-old client who preferred not to give her surname.
The intervention at Ueno Bank triggered massive protests demanding the return of deposits and the removal of then-President Santiago Peña, who was linked to the financial institution. The political and social pressure culminated in his removal through an impeachment trial in the Senate. His vice president at the time, Pedro Alliana, took over the leadership of the government and accelerated compensation payments through the guarantee fund.
The crisis has also hit the labor market. According to Paraguay’s Minister of Labor, Mónica Recalde, up to 7,000 people have lost their jobs at companies linked to the bank in Paraguay, Mexico, Nicaragua, Argentina and Panama.