Under pressure, Romanian ruling party backtracks on referendum

BUCHAREST Mon Jul 16, 2012 4:13pm EDT

BUCHAREST (Reuters) - The Romanian interim president approved a law on Monday reinstating a minimum turnout threshold on referendums, bowing to EU pressure and increasing the chances that suspended President Traian Basescu will survive an impeachment vote in two weeks.

Prime Minister Victor Ponta has led a campaign against Basescu, his political rival, that has drawn criticism in Brussels. Basescu says he is the victim of corrupt politics.

The dispute has rattled markets, sending the leu currency to a new all time low on Monday and raising concerns that it could imperil a 5 billion euro International Monetary Fund aid loan that underpins the recession-hit economy.

The interim president, Crin Antonescu, a Ponta ally who took over after Basescu was suspended by parliament, also promised that other measures criticized by the European Commission would be reversed.

European Commission President Jose Manuel Barroso summoned Ponta to Brussels last week and expressed "deep concern" over some of his policies, saying they undermined democratic institutions.

The measure signed into law by Antonescu states that at least 50 percent of the electorate plus one voter needed to take part for a referendum to be valid.

It restored a threshold that existed but had been abolished by parliament with the votes of Ponta's party, the Social Liberal Union (USL), which has a majority.

The party backtracked after mounting pressure.

The Constitutional Court had ruled that parliament had been wrong to eliminate the rule and demanded that it be respected. Then the EU Commission also made a similar demand.

Despite having defiantly refused to take orders from Brussels on Friday, Antonescu said he had passed the law and added a passage to abide by the court's decision.

"I promulgated this law in line with the parliament decision and in line with the Constitutional Court's ruling," Antonescu said.

Ponta, whose USL took power in May and is expected to win an autumn general election, says Basescu has abused his position to hand power to his allies in previous governments and has blocked his own administration's actions.

"We cannot cooperate," Ponta told private Realitatea TV. "If he keeps his post we will find ourselves in a situation where a political paralysis will prevail in Romania."

He said early presidential elections were the best option.

The new threshold would greatly increase Basescu's chances of survival at the July 29 referendum because turnout in such votes is usually low. Basescu survived a similar referendum in 2007 with 74 percent of ballots voting to let him stay on and only 44 percent turnout.

"It is clear the threshold rule means Basescu now has a great chance of defeating the referendum and return to his presidential chair," said political analyst Mircea Marian said.

Basescu's camp says the USL wants him out because of a growing number of high-profile corruption convictions, including that of a former prime minister and Ponta mentor, Adrian Nastase.

"HUGE STEP BACK"

Antonescu's announcement followed news that the EU and IMF had delayed a mission to review Romania's aid deal until after the referendum. It had originally been slated for July 24.

The dispute with Brussels has also dimmed expectations that Romania, the European Union's second poorest and third most corrupt state, will be able to graduate from an EU monitoring scheme of its courts and anti-corruption efforts.

Five years after joining the EU, Bucharest had hoped the monitoring would end this year. Romania and its ex-communist neighbor Bulgaria are the only EU members subjected to the monitoring, which has been cited as a main reason that they have been kept out of the bloc's passport-free Schengen zone.

Analysts said Antonescu's statement marked a clear retreat by Ponta and the interim president, who jointly run the USL.

"It is a huge step back from the USL and it means bowing to international pressure, chiefly from the Commission," said Marian.

Antonescu also addressed other Commission's concerns. He said lawmakers would meet this week to adjust a separate emergency government decree that also eliminated the turnout threshold and that the EU has also demanded to be reversed.

And he rejected a suggestion last week from a senior USL member that the government could extend voting in the referendum to two days instead of one, a move that would raise the turnout.

(Writing by Michael Winfrey; Editing by Alessandra Rizzo)

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