Paraguay Senate Impeaches President Peña, Appoints Vice President as Successor

Pedro Alliana assumed the presidency of Paraguay on Friday following the impeachment of his predecessor, Santiago Peña, amid a massive banking crisis that deprived nearly half the country’s population of access to their funds.

Senators appointed Alliana, who previously served as vice president, immediately after voting to remove Peña in the wake of the chaotic collapse of Banco Uno, a bank with which Peña had previously been associated.

Senate President Basilio Núñez announced that Peña was “guilty due to his poor performance in his duties,” as 44 out of 45 senators voted in favor of his impeachment.

Hundreds of people gathered outside the Congress building celebrated the decision to remove him in a raucous atmosphere.

“Justice has been served, and now we want him to return our money and go to prison,” said 32-year-old Jessica Acino, speaking to Agence France-Presse (AFP).

Public Prosecutor Silvia Margarita González Wester told journalists that “Peña will remain under house arrest” in Asunción, adding that he would be questioned on Saturday on charges of breach of trust, abuse of power, and embezzlement.

Alliana pledged not to abandon depositors, including retirees affected by the takeover of Banco Uno.

Alliana, who will serve as president until 2028, said, “The sons of the nation who are currently enduring difficult circumstances due to the financial collapse will receive full compensation.”

Opposition lawmakers also submitted an impeachment motion against Alliana in connection with the crisis, but the request did not receive approval from Congress.

The bank’s collapse prompted thousands of people to take to the streets demanding accountability for Peña, who was backed by the United States and held a stake in the Vázquez Group, which controlled Banco Uno, until last year.

A Central Bank official told AFP that the disbursement of advance payments to depositors at Banco Uno had begun on Thursday.

José Masiel from the Central Bank’s Deposit Insurance Fund stated, “The process of paying guaranteed advances to Banco Uno depositors began on Thursday afternoon.”

The ousted right-wing president said in a video clip posted on the X platform, in which he announced his resignation, “I would like to apologize to the people if I fell short at any stage. I never intended to betray the trust you placed in me.”

He added that his priority was “to reassure the citizens of Paraguay who placed their savings in our financial system,” affirming that he would “appear” before the Senate and “exercise his right to defend” himself during his impeachment trial.

The opposition insisted on proceeding with Peña’s impeachment rather than allowing him to resign, as that would have automatically granted him a lifetime seat in the Senate and, consequently, immunity from prosecution.

The U.S. Embassy in Paraguay expressed its “solidarity with the people of Paraguay” on Friday, without any mention of Peña.

Thousands gathered outside the Congress building on Thursday for the third consecutive night, chanting “Return the money,” according to AFP journalists.

One protester held a sign in front of Congress on Friday that read “Prison for Peña.”

During a protest in Asunción, Cynthia Farina, whose group was dispersed by police using tear gas and water cannons, said, “Santiago Peña has harmed many Paraguayans, families, and business owners, including my son, who had savings in Banco Uno.”

Nadia González, a 26-year-old mother of three, told AFP, “Banco Uno agreed to give us a loan to buy our first home. But the funds were never disbursed, and now we have nowhere to live.”

Owino Bank began as a small digital-only institution, but quickly evolved into a major bank that manages government pension funds and accounts for numerous state-affiliated entities.

The scandal led to the ouster of Central Bank President Carlos Carvalho and Interior Minister Enrique Riera, and eight bank executives were arrested.

Police launched raids on Wednesday and Thursday targeting various sites linked to the Vazquez Group.

The crisis’s repercussions extended to neighboring Argentina, where about 1,000 employees of ITTI, a technology company owned by the Vazquez Group, were placed on unpaid leave for 30 days.

The crisis also affected the football sector, as Owino Bank sponsors several first-division teams, as well as the Paraguay national team.

In a statement posted on X, members of the national team wrote, “We too were victims of this situation.”