Impeachment trial of Paraguay's President Peña begins after bank scandal resignation

Paraguay's Senate on Friday rejected President Santiago Peña's bid to delay his impeachment trial over a banking scandal that has seen millions of people temporarily lose access to their deposits.

Senate President Basilio Nuñez said Peña's bid for a three-day delay to prepare his defence "did not receive the necessary votes, so the extension is rejected."

The US-allied leader tried to resign on Thursday over the financial crisis but Congress put the request on hold while the impeachment process moves forwards, which means he will remain in office provisionally.

Then on Friday Peña requested three extra days to prepare his defence for the impeachment process.

He wrote on X that he had been served with a 15-page indictment with around 300 pages of appendices the evening before.

"This is not due process," he added.

Paraguay's Peña offers resignation amid banking scandal, protests

To display this content from YouTube, you must enable advertisement tracking and audience measurement.

Accept Manage my choices

One of your browser extensions seems to be blocking the video player from loading. To watch this content, you may need to disable it on this site.

Try again

'Give back the money'

The Central Bank's seizure of Peña-linked Ueno Bank two days earlier froze the deposits of some three million people, including pensioners, and sparked angry demonstrations across the country.

Thousands of Paraguayans gathered outside Congress on Thursday to protest against the president, who is still technically in power as his resignation awaits legislative approval.

"Give back the money", AFP journalists heard them yelling. Earlier demonstrations featured clashes with the police, who used tear gas and water cannon on the crowd.

"My family ran out of money, we don't have any cash. Santi (Peña) is a criminal, he has to go to jail," 21-year-old student protester Andres Maldonado said.

Lawmakers voted unanimously Thursday to launch impeachment proceedings against Peña over the crisis, alleging misconduct and a conflict of interest in dealings with the bank to which he is tied.

The right-wing president said he would attend his impeachment trial, which is set to begin Friday, after earlier apologising to the people of Paraguay.

"It was never my intention to betray the trust you placed in me," he said in a video posted on X announcing his resignation.

Peña's priority – he added – is "the peace of mind of Paraguayans who entrusted their savings to our financial system".

Peña's Interior Minister Enrique Riera also resigned from his post Thursday, according to a decree published in local media, with Carlos Benitez appointed to replace him in the interim.

Read moreParaguay, a tax and political haven for Brazil's far right

'Nowhere to live' 

Paraguay's Central Bank said it took over Ueno due to a severe capital shortfall, in order to "protect depositors and preserve the stability of the financial system".

"Ueno approved a loan for us to buy our first house. But the funds were never disbursed, and now we have nowhere to live," 26-year-old Nadia Gonzalez, a mother of three, told AFP.

Long lines of people trying to withdraw their money from Ueno branches snaked down Asuncion's streets on Tuesday and Wednesday.

Peña owned shares in a group that controlled the bank, but he sold them last year.

He had attempted to ease tensions by requesting the resignation of Central Bank president Carlos Carvallo – who consented – and setting a five-day limit for the return of funds. Neither measure proved sufficient.

Congress called an extraordinary session of both chambers Thursday to decide whether to accept Peña's resignation or reject it and proceed with the impeachment process.

But the session failed to reach a quorum, so the vote did not go ahead.

A later extraordinary session scheduled the impeachment trial to begin on Friday morning.

"A criminal scheme has been set up here that has dedicated itself to draining a bank, under the protection of institutions he controlled as president of the republic," opposition lawmaker Raul Benitez stated.

The aim is to conclude the trial on Friday as a way to "reassure the public", ruling party Senator Derlis Maidana told reporters.

Vice President Pedro Alliana is set to take over as leader of the South American nation.

(FRANCE 24 with AFP)