Pedro Alliana assumed the presidency of Paraguay on Friday, stepping into the role immediately after the Senate voted overwhelmingly to remove his predecessor, Santiago Peña, amidst a catastrophic banking crisis that blocked millions of citizens from accessing their funds. Lawmakers in the upper house elevated Alliana, who previously served as vice president, following an urgent vote tied to the sudden collapse of Ueno Bank, an institution historically connected to the ousted leader.
Senate President Basilio Nunez formally announced Peña's removal after 44 out of 45 senators voted to sustain the impeachment charge of gross incompetence, with only a single lawmaker absent. The decision drew jubilant crowds outside the national legislature in Asuncion, where demonstrators had spent consecutive nights demanding accountability and the return of their savings.
What led to the Senate impeachment vote?
The downfall of Ueno Bank mobilized thousands of citizens into the streets to protest against Peña, whose former association with Grupo Vazquez—the conglomerate that previously controlled the financial institution—drew intense public backlash and accusations of severe conflicts of interest. Although Peña tendered his resignation ahead of the proceedings, legislators forged ahead with the trial to strip him of his political immunity.
Paraguayan authorities detained the former president under house arrest shortly after the vote concluded, according to prosecutor Silvia Margarita Gonzalez Vester. Investigators are probing Peña on allegations of breach of trust, influence peddling, and the misappropriation of public funds, with formal questioning scheduled for Saturday.
How are affected depositors being compensated?
Addressing the nation following his swearing-in, President Alliana vowed to protect the nearly three million affected account holders, including pensioners whose funds were frozen amid insolvency concerns at Ueno Bank. Alliana is slated to complete the remainder of the presidential term through 2028.
"Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated," Alliana stated. Central Bank officials confirmed that advance reimbursements commenced on Thursday afternoon, prioritizing depositors without active loans who maintain accounts at separate financial institutions. The initial payout phase covers claims up to approximately $1,600, with subsequent phases to be rolled out progressively.
What broader fallout has the financial scandal caused?
The fallout from the Ueno Bank collapse has sent shockwaves across multiple sectors in Paraguay, claiming the positions of Central Bank President Carlos Carvallo and Interior Minister Enrique Riera, alongside the arrest of eight bank executives. Law enforcement agencies executed coordinated raids across properties tied to Grupo Vazquez throughout the week.
The crisis also reverberated across borders, forcing the temporary suspension of roughly 1,000 employees at ITTI, a technology firm affiliated with Grupo Vazquez operating in neighboring Argentina. Additionally, the domestic sports landscape faced disruptions, as Ueno Bank's sponsorship of several top-tier football clubs and the national team left athletic programs grappling with financial uncertainty.