Paraguay has been thrown into political turmoil after its Senate impeached President Santiago Peña over a massive banking crisis that left nearly three million depositors struggling to access their money.
The dramatic development saw Vice-President Pedro Alliana take over as president on Friday after 44 of 45 senators voted to remove Peña from office over the collapse of Ueno Bank.
The decision triggered celebrations outside Congress, where hundreds of protesters demanded justice, the recovery of their savings and the prosecution of those responsible for the financial disaster.
But the crisis took an even more dramatic turn when Paraguayan authorities placed Peña under house arrest shortly after his removal from office.
Prosecutor Silvia Margarita González Vester confirmed that the former president would face questioning over allegations including breach of trust, influence peddling and misappropriation of funds.
The controversy centres on Ueno Bank, whose financial collapse affected millions of customers, including pensioners and businesses. The institution had become a major player in Paraguay’s banking sector, handling state pensions and accounts belonging to several government entities.
Opposition lawmakers accused Peña of a conflict of interest, citing his previous stake in Grupo Vázquez, the company that controlled Ueno Bank. Peña, however, denied the allegations.
Following his inauguration, Alliana promised that affected depositors would not be abandoned, assuring citizens that they would receive compensation.
“Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated,” he said.
The Central Bank has already commenced the first phase of compensation, with eligible depositors expected to receive up to $1,600. Further beneficiaries will be announced as the process progresses.
The scandal has also claimed the positions of Central Bank President Carlos Carvallo and Interior Minister Enrique Riera, while eight executives of Ueno Bank have been arrested.
Beyond Paraguay, the financial disaster has begun affecting businesses in neighbouring Argentina, where about 1,000 employees of technology firm ITTI, linked to Grupo Vázquez, were suspended for 30 days without pay.
The crisis has sparked days of protests in the capital, Asunción, and other cities, with angry depositors demanding the return of their money.
As Peña’s political future hangs in the balance, Paraguay faces the challenge of restoring confidence in its banking system and holding those responsible for the crisis accountable.
AFP
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