Paraguay's President Pena Faces Impeachment as Financial Crisis Grips Nation

Lawmakers in Paraguay have reignited impeachment proceedings against President Santiago Pena, just a day after his resignation amidst the nation's most severe financial crisis in decades. The Senate convened an extraordinary session on Friday to deliberate on Pena's political future, resolving to proceed with efforts to remove the conservative economist from his post. Formal impeachment charges were filed against the president on Thursday, notwithstanding his resignation. Pena, who assumed office in 2023, has requested a 72-hour extension to prepare his defense before the Senate. These proceedings follow a decisive vote in Paraguay’s lower house of Congress, where representatives overwhelmingly approved impeachment charges against Pena with a 78-0 vote.

The political upheaval surrounding the president emerges after Paraguay’s central bank intervened at Ueno Bank earlier this week. Ueno Bank, a rapidly expanding digital lender, was cited for breaches of minimum solvency requirements. Pena previously held a stake in Ueno’s parent company, Grupo Vazquez, until last year, a period during which he asserts he divested his shares. Paraguayan legislators have accused the president of a conflict of interest and raised questions about whether authorities adequately responded to prior warnings concerning the lender’s financial stability.

The collapse of Ueno, which managed $850 million in public funds, has left over half of Paraguay’s population unable to access their accounts. This situation has intensified scrutiny on the government's relationship with the bank and the efficacy of financial regulators. In a video address on Thursday, Pena apologized for failing to avert the crisis, stating, “My greatest wish is that the return of those funds be guaranteed, that the deposit guarantee fund fulfil its purpose, and that public funds — as well as the resources that belong to all Paraguayans — be protected.”

The crisis has also led to the resignation of Paraguay’s central bank chief, Carlos Carvallo, and the issuance of arrest warrants for eight Ueno executives, who subsequently surrendered to authorities. Paraguay’s attorney general has initiated three criminal investigations into the bank’s collapse, focusing on its regulatory oversight and the management of public funds within the institution. Should Pena be convicted in an impeachment trial, he would forfeit his lifetime Senate seat and the legal protections typically afforded to former Paraguayan presidents.