By Indianara Goz
Brazilian President Luiz Inácio Lula da Silva, of the Workers' Party (PT), used social media to offer his welcome to Pedro Alliana, who took office as president of Paraguay on Friday (Nov. 6). Alliana took over after Paraguay's Senate approved the impeachment of Santiago Peña. Lula wants to bring the new leader to Brasília for bilateral talks, but his message comes as Paraguay goes through one of the biggest institutional crises of its recent history.
Lula's message of friendship
In his post, Lula said he hopes to receive Alliana "soon in Brasília, an opportunity in which we can examine our bilateral agenda and give renewed impetus to our historic bonds of friendship." He also reaffirmed Brazil's commitment to regional cooperation and to integration in South America.
The celebratory diplomatic tone contrasts sharply with what Alliana inherits. Lula's message focuses on friendship and integration, not on the customers who are locked out of their own money.
What led to Peña's removal
Paraguay's Senate voted unanimously to impeach Peña, who was accused of conflicts of interest, irregularities in the management of pension funds and changes to the rules governing Ueno Bank. The former president had been a shareholder in a company linked to the bank until March 2025. Shortly after he took office in 2023, the institution received about US$ 850 million in deposits from public bodies, including funds from the Social Security Institute.
After the impeachment was approved, Peña was arrested.
Ueno Bank customers without access to their money
Paraguay's Central Bank suspended Ueno Bank's operations on Nov. 3, citing insufficient financial resources. Since then, millions of customers have been unable to access their deposits. At his inauguration, Alliana promised that these people will get their money back. The material available does not yet include a timetable for repayment.
That is the uncomfortable question. While the new government tries to explain how it will return families' savings, the Brazilian president is already speaking of "renewed impetus" in relations. For someone whose money is stuck in a failed bank, the issue is not friendship between governments. It is what will happen to their balance.
Why it matters
Paraguay is one of Brazil's neighbors, and the two countries are linked by trade, regional blocs and shared infrastructure. Political and financial instability in Paraguay therefore matters to Brasília, and how the Lula government positions itself toward the new administration will be closely watched.
What comes next
Lula's invitation for Alliana to visit Brasília has no date yet. Until then, Paraguay must show it can stabilize its banking system, answer for the accusations against the former president and keep its promise to return the deposits. Any delay on those fronts is likely to weigh on the relationship with any partner that approaches the new government.
