Paraguayan President Santiago Peña, one of the leaders of South America's conservative right, resigned on the 5th (local time) without completing his term due to suspicions of involvement in banking corruption.
It has been three days since the Central Bank of Paraguay initiated liquidation procedures for 'Bank Ueno', a large digital bank, and one day after the opposition party proposed an impeachment motion against him.
President Peña has been strongly criticized by opposition lawmakers for his close relationship with the bankrupt Ueno Bank.
In a video released on this day, President Peña revealed the reason for his resignation, saying, "I made this decision keeping in mind the need to protect our country's stability, social peace, and democratic system."
He added, "If I have made a mistake at any point, I would like to apologize to the public," but did not directly acknowledge the mistake regarding the suspicion of involvement with the bankrupt Ueno Bank.
President Peña took office in August 2023 and his term runs until 2028. Foreign media outlets, including Reuters, reported that with President Peña's resignation, Vice President Pedro Ajancia is expected to be inaugurated as interim president this afternoon. It is predicted that the government will go to an acting system for the time being rather than an early presidential election.
With President Peña's fall, the 'blue tide' (right-wing wave of power) in Latin America is likely to weaken further.
Paraguay, led by Peña, is one of the major member countries of the 'Shield of the Americas', a multilateral security consultative body launched by US President Donald Trump.
Following the fact that the right-wing rise was put on hold due to the re-election of Brazil's President Lula, and the ruling Republican Party's failure to secure a majority in the Senate and House of Representatives in the U.S. midterm elections, another bad news has struck the right-wing camp.
The announcement of President Peña's resignation came as the House of Representatives plenary session was deliberating the impeachment bill.
The day before, 35 opposition members of the House of Representatives submitted a motion for impeachment to the National Assembly on the grounds of misconduct in office and conflict of interest. At least 53 of the 80 members of the House of Representatives, more than two-thirds, had to vote in favor, but since the ruling party had the majority, the possibility of passing impeachment was not high in the first place.
However, the situation took a sharp turn when the ruling party, the National Alliance of the Republic (ANR), voted in favor at the plenary session on the 5th. It was decisive that ANR leader Horacio Cartes, a prominent member of the ruling party and a highly influential political figure, announced that he supported impeachment.
Ueno Bank, which led to President Peña's resignation, originally started out as a fintech company, but grew into a large digital bank under the protection of the government. Immediately after his inauguration, President Peña selected Carlos Carvallo, then president of Ueno Bank, as central bank president, and the Peña government has since poured a huge amount of public funds.
Accordingly, public funds worth 800 to 850 million dollars (approximately 1.7 trillion won to 1.15 trillion won) flowed into the bank. Among these, $380 million (approximately 510 billion won) was invested by the Paraguayan State Pension Fund (IPS). With government support, Ueno has grown into a large bank with 3 million customers, or 60% of Paraguay's adult population.
However, on the 4th, the Central Bank of Paraguay announced that it had begun liquidation procedures for Bank Ueno, and even deposit withdrawals were blocked due to the resulting 'bank run' (mass withdrawal of deposits), quickly putting President Peña in a political predicament. In the past, he owned shares of the parent group that controlled Ueno Bank, but sold all of them last year while he was president.
