Paraguay’s Peña resigns amid Ueno crisis, sources report

Paraguayan President Santiago Peña stepped down on Thursday, November 5, according to Bloomberg, which cited the local outlet ABC. The report came as lawmakers opened debate on removing him over the collapse of Ueno Bank, a lender tied to his government. No official statement from the presidency had been published at the time of the report. The night before, Peña's office had denied "categorically" rumors that he was about to resign.bloomberg.com+1

If the resignation is confirmed, it would end a crisis that brought Peña down in a matter of days. Regulators seized Ueno early Tuesday, freezing the savings of millions of Paraguayans, pensioners among them, in a country where about one in three people had deposits at the bank, Bloomberg reported.bloomberg.com

Isolated by His Own Party

Support for impeachment grew early Thursday when Congress President Basilio Nuñez and Colorado Party leader Horacio Cartes dropped their backing for Peña, Reuters reported. Cartes is a former president and was Peña's political mentor. "We will not stand on the side of the theft of public, private and pensioners' funds," Cartes said in a statement quoted by El Mundo.elmundo.es+1

The 36-member Colorado bloc in the lower house then said it would vote for impeachment, leaving the chamber close to unanimous, according to ABC Color. Natalicio Chase, who leads the party's Senate bloc, also called for Peña to resign and said he would back impeachment if he did not, ABC Color reported.abc.com.py+1

Thirty-five lawmakers signed the articles of impeachment in the 80-seat lower house. They accuse Peña of conflicts of interest, misuse of pension funds and institutional cover-ups. Peña held shares in the group that controlled Ueno until last year, according to Reuters.reuters.com

Succession and Fallout

Under the constitution, Vice President Pedro Alliana would take over if Peña leaves office. Alliana also faced an impeachment motion, El Mundo noted, but opposition deputy Rocío Vallejo said there were not enough votes to remove him. She added that a resignation would end the impeachment process and start the procedure for Alliana to take office, Hoy reported.hoy.com.py+1

The central bank took over Ueno after its solvency ratio fell to 5.56%, less than half the 12% regulatory minimum. Inspectors had found that the bank made loans to companies in its owner's group, Grupo Vázquez, without proper risk assessment, El Mundo reported. Central bank chief Carlos Carvallo, who previously led Ueno, resigned Tuesday at Peña's request, and prosecutors ordered the arrest of eight people linked to the bank, Reuters reported.elmundo.es+1

The bank had about 2.9 million customers in a country of 6.1 million people. The deposit guarantee fund covers up to 228 million guaraníes per depositor, which the central bank says is enough to repay 97% of savers in full, according to El Mundo.elmundo.es