Brazil's leftist former president Lula released from prison
BRASILIA/CURITIBA, Brazil (Reuters) - Brazil's leftist former President Luiz Inacio Lula da Silva left prison on Friday after a judge ordered his release, startling financial markets and reigniting both ends of the political spectrum with calls for demonstrations in coming days.
As he walked out of jail, Lula raised a defiant fist of victory in the air to the cheers of a crowd of supporters and members of his Workers Party who waved red flags and held "Free Lula" banners.
His release is expected to further polarize a country that elected far-right President Jair Bolsonaro last year to stop the Workers Party from returning to power after a 14-year run.
Investors were jolted by the prospect of Lula returning to the political stage and uniting opposition to the market-friendly government, although he is barred from running in upcoming elections.
Brazil's currency and benchmark Bovespa stock index both fell 1.8% on Friday, weighed down first by a Supreme Court ruling paving the way for Lula's release and deepening losses after the formal court order letting him go.
"This will strengthen the Workers Party, but also anti-Lulismo and that will strengthen Bolsonaro's movement too, but it will not impact the economic reform agenda underway," said Lucas D'Aragao at ARKO political risk consultancy in Brasilia
"The big question for markets is whether he can run in 2020, and that is very unlikely," D'Aragao said.
In his first speech to supporters waiting for him to walk free, Lula vowed to fight to establish his innocence and excoriated what he called the "rotten side of the judicial system" for "working to criminalize the left."
The federal judge's order freeing Lula followed a Supreme Court ruling late on Thursday ending the mandatory imprisonment of convicted criminals after they lose their first appeal.
The politically charged ruling is expected to free scores of high-profile convicts in the so-called "Car Wash" investigation of public corruption, including Lula, as the former president is known, who had been behind bars for a bribery conviction.
Lula was imprisoned in 2018 for eight years and 10 months after being found guilty of taking bribes from engineering firms in return for public contracts. He has maintained his innocence and said the case against him was politically motivated.
While Lula had fought to overturn the sentence, many urged the Supreme Court to overturn a prior ruling that convicts, including the former president, must do prison time before exhausting their appeals. On Thursday, the top court voted 6-5 that the precedent was in fact unconstitutional.
Following the Supreme Court decision, Lula's lawyer, Cristiano Zanin, was quick to request his release from a cell in federal police headquarters in the southern city of Curitiba.
Lula and his supporters have also criticized the fact that Sergio Moro, a former federal judge who oversaw the Car Wash probe and convicted Lula, accepted an invitation to become the justice minister of far-right President Jair Bolsonaro, a longtime foe of Lula and key rival in last year's election.
Moro said in a statement earlier on Friday that the top court's decision must be respected, and lawmakers can now change the constitution to make prison time mandatory after a first failed appeal.
(Reporting by Anthony Boadle in Brasilia and Leonardo Benassatto in Curitiba; Additonal reporting by Eduardo Simoes in Sao Paulo, Ricardo Brito and Lisandra Paraguassu in Brasilia; Editing by Brad Haynes and Jonathan Oatis)
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