The President of Paraguay, Santiago Peña, resigned on Thursday under increasing pressure due to the collapse of the digital lender Ueno. This decision was made as lawmakers were considering the possibility of impeaching him.
Banking Crisis and Its Effects
Ueno's bank accounts, which were also used for processing pension payments, have been frozen, depriving millions of customers of access to their money. Ueno also held hundreds of millions of dollars in public funds. This crisis caused President Peña to lose support from the President of Congress, Basilio Núñez, and the leader of the ruling party, Horacio Cartes.
Accusations and Impeachment
Thirty-five opposition lawmakers and discontented members of the ruling party presented articles of impeachment in the House of Representatives with 80 seats, accusing Peña of misusing pension funds and institutional coverages related to Ueno. Additionally, loans that Peña had received from Ueno were raised as part of the accusations.
The accusations included the President's improper interference in the Social Security Institute, known as IPS, and preferential treatment towards Ueno. IPS is responsible for managing pension and health funds for most Paraguayan workers and had about $355 million in this bank.
In recent days, Ueno announced that it held about $800 million of public sector deposits, which is about a quarter of its total deposits. The bank also suspended its services due to a decline in its solvency ratio to the minimum required, and its branches have been closed.
Widespread protests have occurred outside the Ministry of Labor, with Ueno employees and other affiliated companies demanding overdue wages and compensation. On Wednesday, retirees and depositors took to the streets in Asunción, calling for Peña's impeachment.
Security officials arrested eight senior executives, including Ueno's founder, Miguel Vázquez, and the bank's president, Juan Manuel Gustale, and charged 27 banking officials and business associates with offenses such as breach of trust and attempted fraud.
In a video message on Wednesday, Peña attempted to calm customers and promised that legislation would be enacted to return what is rightfully theirs to every saver as quickly as possible.
This crisis also prevented him from attending the Ibero-American Summit in Madrid. Peña, a conservative economist, assumed the presidency in August 2023 for a five-year term.
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