Pedro Alliana became Paraguay’s president on Friday after lawmakers impeached his predecessor, Santiago Pena, over a massive banking crisis that left nearly half the country’s population unable to access their accounts.
Alliana, who previously served as vice president, was appointed by senators shortly after they voted to remove Pena over the chaotic collapse of Ueno Bank, a financial institution with which the former president had business links.
Senate President Basilio Nunez declared Pena “guilty of poor performance in his duties” after 44 of the 45 senators voted in favour of impeachment. One lawmaker was absent.
Hundreds of people gathered outside Congress erupted in celebration following the vote.
“Justice has been done. Now we want him to give us back our money and go to jail,” 32-year-old Jessica Aquino told AFP.
Authorities placed Pena under house arrest minutes after his removal, prosecutor Silvia Margarita Gonzalez Vester told reporters.
In his first remarks as president, Alliana pledged to compensate the nearly three million depositors affected by Ueno Bank’s takeover amid concerns over its insolvency. Those affected include pensioners and other vulnerable customers.
“Compatriots who are now going through a difficult time as a result of the financial collapse will be fully compensated,” Alliana said. He is expected to serve as president until 2028.
Opposition lawmakers had also sought to impeach Alliana over the crisis, but their motion failed to secure congressional approval.
Money begins trickling back
Ueno Bank’s collapse triggered days of protests, with thousands taking to the streets to demand accountability from Pena, a US-backed politician who held a stake in Grupo Vazquez, the conglomerate that controlled Ueno, until last year.
The Central Bank began making advance payments to some affected depositors on Thursday afternoon, an official told AFP.
The first phase of compensation, covering amounts of up to approximately $1,600, targets customers without outstanding loans who have accounts at another Paraguayan bank or financial institution through which they can receive the funds.
Jose Maciel, of the Central Bank’s Deposit Guarantee Fund, said further beneficiaries would be identified as the payment process progresses.
“The next beneficiaries will be announced progressively over the course of the payment process,” he added.
Pena had offered to resign over the crisis, but lawmakers proceeded with impeachment, stripping him of his political immunity.
Opposition figures accused him of a conflict of interest, an allegation he denied.
The Attorney General’s Office said it was investigating him over “acts related to the supervision and resolution of Ueno Bank S.A. and the placement of public funds in said entity.”
Pena is expected to be questioned on Saturday over alleged breach of trust, influence peddling and misappropriation of funds, prosecutor Gonzalez Vester said.
In a post on X shortly before his removal, Pena called for national unity and reconciliation.
“Today, we must come together as Paraguayans to rebuild our institutions and restore trust,” he wrote.
The US Embassy in Paraguay expressed solidarity with the country’s population on Friday but made no direct reference to Pena’s removal.
Protesters demand prison for Pena
“Pena in prison,” read one of the placards displayed outside Congress on Friday, reflecting the anger among depositors who have been unable to recover their savings.
On Thursday, thousands of demonstrators took to the streets of Asuncion and other cities for a third consecutive night, demanding the return of their money.
“Santiago Pena has hurt so many Paraguayans, so many families, business owners and small business people, including my own son, who had savings in Ueno Bank,” Cynthia Farina told AFP during a protest in the capital.
Police eventually dispersed the demonstration using tear gas and water cannons.
Ueno started as a small fintech company operating a digital-first business model aimed at low-income customers. It rapidly expanded into a major banking institution, handling state pension payments and accounts belonging to several government entities.
The scandal has already led to the departures of Central Bank President Carlos Carvallo and Interior Minister Enrique Riera, while eight Ueno executives have been arrested.
Police also carried out raids on several properties linked to Grupo Vazquez on Wednesday and Thursday.
The fallout has extended beyond Paraguay’s borders. In neighbouring Argentina, around 1,000 employees of technology company ITTI, which belongs to Grupo Vazquez, were suspended without pay for 30 days.
The crisis has also affected Paraguayan football, with Ueno Bank sponsoring several top-flight clubs and the national team.
“We were also victims of this situation,” the national team said in a statement posted on X.
AFP
