Paraguay’s President Offered to Resign. Congress Refused, and Impeached Him Instead

Santiago Peña is still the president of Paraguay on Friday morning. He tried to resign on Thursday. Congress would not let him go.

Peña announced his resignation in a video posted Thursday afternoon, saying no position mattered more than Paraguay’s well-being. The Chamber of Deputies voted 78-0 later Thursday to send him to an impeachment trial instead.

A joint session of Congress met Thursday evening to take up the resignation. After about two hours of debate, lawmakers from Peña’s own Colorado Party walked out. The session lost its quorum, and Senate President Basilio Núñez adjourned it without a vote. Peña stayed in office.

Opposition lawmakers had argued against accepting the resignation. Under Paraguay’s constitution, a former elected president becomes a senator for life unless removed by impeachment, and that seat carries immunity from prosecution. Accepting the resignation, they said, would have let Peña keep those protections.

The bank at the center of it

The crisis began with Ueno Bank, a fast-growing digital lender with about 3 million customers in a country of 6.5 million people. That is roughly 60 percent of Paraguay’s adults.

The central bank moved to wind the bank down this week after finding its solvency ratio had fallen below half of the legal minimum. Accounts were frozen. Ueno held about $800 million in public deposits, including about $380 million from the state pension and health fund, according to the Associated Press.

The attorney general’s office opened three criminal investigations into the bank’s collapse, its supervision and the placement of public money there. Arrest warrants were issued for eight Ueno executives, who later turned themselves in, Reuters reported.

The central bank began paying deposit guarantees on Friday, starting with customers holding up to 10 million guaraníes, about $1,565.

Peña’s defense

Peña held shares in Grupo Vázquez, the business group that controls Ueno, until March 2025. Lawmakers accuse him of conflicts of interest, misuse of pension funds and shielding the bank from scrutiny. He denies wrongdoing and has said the affair is a regulatory matter for the courts.

He said on social media that he would appear before the Senate to exercise his right to a defense, “not out of personal pride, but because being accountable and providing explanations is also a responsibility I owe to the Paraguayan people.”

The Senate opened the trial Thursday night. Peña is due to present his defense at 10 a.m. local time on Friday. Removal requires 30 of the Senate’s 45 votes. If he is removed, Vice President Pedro Alliana takes over.

The fallout has already cost two senior officials their jobs. Central bank chief Carlos Carvallo, who once ran Ueno’s predecessor, resigned on Tuesday at Peña’s request. Interior Minister Enrique Riera resigned on Thursday and returned to the Senate, where he can vote in the trial.

Peña has led Paraguay since August 2023. His own party turned on him this week: Colorado Party leader Horacio Cartes withdrew his support, and Colorado deputies joined the unanimous vote to impeach. The Chamber also considered impeaching Alliana, but that motion failed, 48 votes against to 30 in favor.