Paraguay's President Santiago Peña has been impeached and placed under house arrest amid a political crisis sparked by a bank collapse that left more than half of the country's citizens without access to their bank accounts.
President Peña was arrested on the 6th (local time) just minutes after lawmakers from the ruling and opposition parties, including members of his own party, unanimously passed an impeachment bill, forcing him to step down from office. The impeachment follows the collapse of Ueno Bank, which was linked to President Peña's personal business, earlier this week.
President Peña announced his intention to voluntarily resign on the 5th, but instead of accepting it, the Senate passed an impeachment bill and charged him with abuse of power. Accordingly, the immunity normally granted to former presidents was taken away.
President Peña, who owned a stake in the bank's parent company until last year, has denied all allegations raised against him.
The reasons for President Peña's impeachment included conflict of interest, interference in the exercise of supervisory authority by financial authorities, misappropriation of pension funds, and systematic cover-up involving the central bank.
Prosecutor Silvia Margarita González Vester announced on the 7th that former President Peña will be investigated on charges of breach of trust, influence, and misappropriation of public funds.
Pedro Aliana, President Peña's vice president, was inaugurated as the new interim president. He promised not to ignore the millions of people affected by this financial scandal.
President Aliana said, "We will compensate the full amount of damage to the people who are suffering from the financial collapse." He is scheduled to serve as president until 2028.
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After the digital bank Bank Hueno went bankrupt and its assets were seized by the Central Bank of Paraguay, more than half of Paraguayans lost access to their savings.
On the 3rd and 4th, in Asuncion, the capital, people lined up on the street to withdraw money at the Ueno Bank branch.
It is estimated that about 3 million depositors are still unable to access their savings and pensions, and citizen anger is growing, especially in the capital Asunción.
As a result, protests took place across the country, and on the 5th, thousands of people took to the streets and demanded their deposits be returned.
In an earlier protest, police and protesters clashed. Police used tear gas and water cannons against protesters.
The impeachment motion against President Peña was passed with the approval of 44 out of 45 senators. One member of parliament did not attend the vote.
In a video posted to He added that the top priority was “to ensure that Paraguayans who entrust their savings to our financial system can feel safe.”
Afterward, Senate President Basilio Núñez said President Peña was found guilty of "dereliction of duty."
“We are facing the largest corruption scandal in the history of democracy,” said Senator Rafael Filisola. “It is an enormous blow to the country, its people, Paraguay’s credibility and its image.
Analysts believe that former President Peña is likely to be indicted in connection with the bank failure.
Former President Peña's lawyer, Ricardo Freda, called the allegations "reckless accusations" and criticized them as "irresponsible and opportunistic claims."
*This article used artificial intelligence (AI) in the process of translating the original English text and was verified by a BBC reporter before publication. Click to learn more about the BBC's AI use policy.
