Court seen reinstating Romanian president in referendum ruling
* Court seen likely to invalidate referendum
* Ruling will not end battle between PM and president
* EU concerned over rule of law
By Radu Marinas
BUCHAREST, Aug 21 (Reuters) - Romania's Constitutional Court is expected to rule on Tuesday that a referendum on whether to impeach suspended President Traian Basescu is invalid - a decision that would return him to office and probably prolong his power struggle with the prime minister.
The battle pitting Basescu against Prime Minister Victor Ponta, who has led a campaign to unseat the president, is testing democracy in Romania two decades after the overthrow of communist leader Nicolae Ceausescu.
The crisis has stalled policymaking, sent the leu currency to record lows and raised concern in the European Union, which accused Ponta of undermining the rule of law and intimidating judges.
Parliament suspended Basescu in a decision backed by Ponta's Social Liberal Union (USL) last month.
In the July 29 referendum, 88 percent of those who cast ballots voted to impeach Basescu, but only 46 percent of registered voters took part, fewer than the required threshold of 50 percent of the electorate.
The Constitutional Court has to validate the outcome in a politically-charged decision that was originally due on Aug. 2 but has since been postponed.
The court has asked to see revised voter lists after coming under pressure by the government, which says turnout may have been sufficient if data from a 2011 census were used and people who have died or live abroad were taken off the lists.
Many political analysts say they expect the court to reject the government's argument.
"I see a majority of judges voting for the invalidation of the impeachment referendum," said Sergiu Miscoiu, the director of the CESPRI Centre For Political Studies think-tank.
"The government may further try to push with its validation drive and to try to further keep Basescu out of the post but it would be very difficult."
Ponta, who took over three months ago to become Europe's youngest prime minister at 39, has accused Basescu of blocking government policies and turning a blind eye to graft.
Ponta said he hoped the political impasse would end.
"I wish a decision is taken tomorrow and this will practically help close any talk about the political crisis," he said on Monday.
The Council of Europe said the court had come under "shocking" political pressure ahead of its ruling and had appealed to the council for protection.
"I've lost my trust in the Constitutional Court because each and every member is placed there based on various political interests," said Alexandru Mirica, a 62-year-old pensioner In Bucharest.
"If we had laws in place we wouldn't need those people anymore. I'm pretty sure that Basescu will return."
POWER STRUGGLE TO LAST
Basescu, a former oil tanker captain and president since 2004, has grown unpopular due to wage cuts and tax hikes he backed under two financing deals with the International Monetary Fund, signed in 2009 and 2011.
The country of 19.5 million, the EU's second-poorest member, briefly dipped into a recession in the first quarter and the political turmoil has further hurt investor confidence.
The IMF has said the government needs to take a string of austerity and privatisation measures by the end of September to keep a 5 billion euro stand-by loan deal on course.
Ponta said he would accept a decision made by at least six members of the nine-strong court, but did not elaborate on other possible scenarios. "If six decide to declare the referendum invalid ... then Basescu returns to his post," he said.
However, analysts said the court is more likely to make a 5-4 decision in Basescu's favour.
A decision to reinstate Basescu may end the immediate impasse but the power struggle may last until parliamentary elections in November. Most analysts expect Ponta's leftist USL alliance to win the vote.
Basescu, a conservative, accused the USL of trying to stage a coup and take control of independent institutions.
Basescu and anti-graft experts say Ponta's campaign to drive the president out of power may be linked to a string of corruption investigations, including the conviction of Adrian Nastase, a former prime minister and mentor to Ponta.
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