The Mercosur regional bloc has suspended Paraguay's membership for having impeached and ousted its president, but will not impose economic sanctions on the country.

The South American group made the announcement on Friday after Fernando Lugo, the former Paraguayan president was impeached by the country's congress a week ago in a fast-track trial triggered by a land eviction that killed 17 people in clashes between police and peasants.

It will remain suspended from Mercosur until Paraguay holds presidential elections next year.

Cristina Fernandez, the Argentine president, told other heads of state at a Mercosur summit on Friday that the "democratic order was broken" in Paraguay because it carried out a two-hour trial where Lugo was not allowed a proper defense.

But Fernandez said Paraguay would not be slapped with economic sanctions because "they never hurt governments. They always hurt the people".

Paraguay is among South America's poorest nations and any economic sanction by the bloc would have been disastrous since half its trade is with fellow Mercosur founding members, Argentina, Brazil and Uruguay.

Ambassadors recalled

Mercosur barred Lugo's replacement, former Vice President Federico Franco, from attending the summit. Franco says the transition of power in Paraguay was carried out according to the law.

Lugo said at first that he would attend the meeting in order to plead his case with regional leaders but later changed his mind. He then spoke out against retaliatory economic sanctions, which he said would only hurt ordinary Paraguayans.

The removal of Lugo, a former Roman Catholic bishop whose presidency was eclipsed by a cancer diagnosis and several paternity scandals, plunged the country into a political crisis and became a top priority for regional leaders.

Several governments called back their ambassadors and some called his ouster a coup.

The Union of South American Nations, or UNASUR, held an emergency meeting Friday and also suspended Paraguay as a member until its next presidential elections. The regional grouping said Lugo was not allowed a proper
defense.