Teachers go on strike in Paraguay to demand protection for pension fund after bank failure

Public school teachers in Paraguay went on strike this Monday (9) and took to the streets in several cities across the country. The mobilization comes after the collapse of the Ueno bank, which led to the impeachment and arrest of President Santiago Peña.

Silvio Piris, president of the Federation of Educators of Paraguay, stated that teachers are concerned about the fate of around US$60 million (R$330 million) in pension funds deposited in the bank.

"We want the return of this money to be a priority," Piris told Paraguay's Channel 9.

More than 3 million people were left without access to their bank accounts last Tuesday (3), after the Paraguayan government intervened in Ueno Bank. The closure of the institution also affected pension funds and government accounts.

At a press conference on Saturday (7), prosecutors said that Peña will be investigated for crimes of breach of trust and administration for his own benefit. If convicted, he could face up to 20 years in prison.

The former president is being held at a military base while investigations continue. He was replaced by the then vice-president, Pedro Alliana.

Peña was also accused by parliamentarians of using political influence to direct hundreds of millions of dollars in public resources to Ueno.

The corruption investigation also involves the former president of the Central Bank of Paraguay.

The accusations that led to Peña's departure from office indicate that the former president had a stake in Ueno's controlling company, which he divested from under pressure last year.

He would also have appointed a former bank executive to head the Central Bank, responsible for regulating the institution.

Parliamentarians also accuse Peña of allowing the state pension fund to deposit US$355 million (R$1.9 billion) in the bank, above the limit allowed by law. The former president denies wrongdoing.

Last week, the Central Bank began returning deposits to account holders. As of Saturday, according to the institution, more than 1.2 million Ueno customers had received partial or full refunds.

Bank deposits in Paraguay are guaranteed up to approximately US$37 thousand (R$203 thousand).

The crisis provoked a series of protests by account holders, which ended in clashes with the police. The situation also raised doubts about the stability of the Paraguayan financial system.

The country's currency, the guarani, has lost around 8% of its value in relation to the dollar since the Ueno intervention.