A major political upheaval has shaken South America as Paraguay President Santiago Peña was removed from office through an impeachment vote amid a spiraling banking scandal. Leadership of the nation has shifted to Vice President Pedro Alliana, who has been sworn in as the new head of state. Alongside his ouster, authorities have ordered that Peña be placed under house arrest.
Impeachment Proceedings in the Senate
The upper house of the Paraguayan legislature voted to convict and remove Santiago Peña through impeachment proceedings. Lawmakers accused him of severe negligence and abuse of power tied to a major financial collapse within the banking sector. Following his removal, Vice President Pedro Alliana immediately took the oath of office and will serve out the remainder of the presidential term through August 2028.
During the legislative session, all 44 senators present voted in favor of removing Peña, while a single member was absent. The decisive vote sealed his departure after lawmakers rejected an earlier resignation offer made by him, opting instead to pursue formal impeachment. Prior to these developments, he had attempted to step down voluntarily.
The Collapse of Ueno Bank Sparks Crisis
The political turmoil in Paraguay began when Ueno Bank suddenly collapsed and closed its doors. The financial institution had been struggling with severe liquidity shortages and solvency issues, prompting the central bank to intervene and take direct control of the troubled lender. Consequently, millions of account holders found themselves locked out of their deposits and standard banking services.
Investigations subsequently revealed business ties linking Peña to the failed bank. Critics alleged that his political influence enabled regulatory leniency and government backing for the institution. Despite these accusations, Peña consistently denied any wrongdoing.
Criminal Investigations and Political Background
Following the banking collapse, the Attorney General of Paraguay initiated three separate criminal investigations against Peña and several former officials. Prosecutors are probing allegations including breach of trust and abuse of power. Because he was removed via impeachment, Peña lost the legal protections usually afforded to former presidents, leading prosecutors to order his house arrest.
Taking office in August 2023 at the age of 44, Peña is a member of the right-wing Colorado Party and previously worked as an economist and finance minister. He has long been regarded as one of Latin America leaders friendly to the administration of United States President Donald Trump. Despite the sudden shift in government, the United States indicated that it intends to maintain its diplomatic relations with Paraguay.
