MercoPress. South Atlantic News Agency

Colorado Party of Paraguay urges lawmakers and supporters to stand behind President Abdo

Senator Juan Carlos Galaverna said the people have the right to demand reconciliation among all members of the Colorado Party.

Paraguay's Colorado Party Monday backed its support of President Mario Abdo in the aftermath of the political scandal sparked last week when the somber Itaipu electricity deal with Brazil was unearthed, leaving the government on the brink of impeachment, a threat which has been averted.... for now.

The Colorado Party leadership called on national and party authorities through a statement to stand behind the unity of the National Republican Association (ANR) and be vigilant for any attempt to alter the constitutional order and social peace of the Republic.

The Colorados once again supported President Mario Abdo Benítez and Vicepresident Hugo Velázquez, who recently dodged impeachment following  the bilateral agreement signed between Paraguay and Brazil, on the purchase of energy from the Binational Itaipu dam and the extra cost of USD 250 million it brought on the National Electricity Administration (Ande), which was avoided after the secret May 24 deal became public and Brazil accepted to renegotiate.

Senator Juan Carlos Galaverna said the people have the right to demand reconciliation among all members of the Colorado Party. He also pointed out that the Colorado lawmakers should not hesitate to defend the Government, or face being expelled from the ANR.

He also recalled that when the Colorado government fell in 2008, they had the curse of the government of the “liar priest”, in reference to former bishop and current Senator Fernando Lugo's 2012 impeachment for the massacre of Curuguaty.

By the same token, he said that after the political trial the liberal “cheater and scoundrel” (Federico Franco) completed the Government. In case of impeachment against Abdo and Velázquez, Speaker Blas Llano, also of the Authentic Radical Liberal Party (PLRA), could occupy the Presidency, as happened in 1999 with Luis González Macchi, after the resignation of Raúl Cubas Grau, for the crisis unleashed by the death of Vice President Luis María Argaña.

“I am proud to be a sectionalist,” Galaverna stressed.

Yacyretá head Nicanor Duarte Frutos, said that it is a delicate moment that the country goes through and that it takes the unity of the Colorado Party to apease the nation. “No political association can prosper when disputes are founded on personal hatreds, sterile antagonisms and individual confrontations,” he said.

Deputy Arnaldo Samaniego, a former mayor of Asunción, congratulated President Abdo Benítez and former president Horacio Cartes, “for safeguarding the interests of the Republic.”

Senator Silvio Ovelar recognised the ANR Chairman Pedro Alliana, for his role in preventing last week proposed impeachment.

Regardless of the ruling party's stance, the truth is nothing can ever be the same while Abdo is in power. The political upheaval generated around the secret agreement seriously damaged Paraguay's international image and jeopardises the possibilities of continuing to move towards investment, according to leading businessman Alberto Acosta Garbarino. “I do not think that you can feel anything yet, because it all has just happened.“

He added that ”the damage to the country's image has been sizeable, it had a great international impact, all foreign investors and risk rating agencies even emphasize that Paraguay's weakness is the institutional weakness.”

The Latin American Financial Action [money laundering and terrorist financing] Task Force (Gafilat) will decide in December 2020 whether or not to re-instate Paraguay into the gray list of the International Financial Action Task Force (FATF).

Acosta Garbarino warned that the departure of María Epifanía González from the Secretariat for the Prevention of Money or Property Laundering (Seprelad) also puts the evaluation at risk, because in his view the former minister was instrumental towards the necessary changes. The businessman fears that if He adds that if for political reasons the new minister, Carlos Arregui, also needs to leave, theb that would deall a “fatal blow” to the country.

González's son is the lawyer José Rodríguez (aka Joselo), who wound up involved in the obscure negotiations that led to the now nullified agreement.

“What happened these days has been pathetic, it demonstrates how terribly weak our institutions are: an issue that every year occurred in the contracting of energy by Ande and Eletrobras was escalating and even affected the president in a few days. This also demonstrates the irresponsibility of the political class and a political opportunism...“ of those who sought to overthrow Abdo, he added.

The alleged participation of Vice President Velázquez in the secret Itaipu agreement, on the other hand, issues an alert to those who are looking to invest in the country, according to economist Gladys Benegas.

”Access to political power paves roads, undoes laws, etc., the one with ties to power has advantages and is likely to change the laws again,” she went on.

The international rating agency Fitch improved Paraguay's sovereign rating last December, going from “BB with a positive outlook” to “BB + with a stable outlook,” which placed the country at a level of investment grade. Moody’s maintained the “Ba1 with stable outlook” rating, which is also the highest in the speculative grade. The risk note influences the conditions under which financing can be accessed: the higher the note, the lower the cost.

Abdo has been temporarily saved by the bell, but the crisis is not completely deactivated and the institutional instability caused by the rupture between the president and his vice president floats in the environment, which could drag both of them if there is no courage to end the problem. Hence, the importance of the Colorado leadership drive towards unity.

The secret Itaipu affair has already swept through Foreign Minister Luis Castiglioni, the powerful head of Itaipú, Alberto Alderete; the ambassador to Brazil, Hugo Saguier; the head of Ande, Alcides Jiménez and the technical director of the binational entity, José Sánchez Tillería, as well as other loser ranked advusers.

The political climate was reheated with a publication that involved the Vicepresident in an operation to sell energy to a Brazilian company, linked to Brazilian President Jair Bolsonaro, and from that moment he became the main villain in the history of the secret act from Itaipu.

Velázquez still looks like the lamb to be sacrificed by either resignation or impeachment if Abdo is to regain the political drive he needs to fulfill his term.