World Bulletin / News Desk
The fate of Romania's president hangs in the balance on Monday as the Constitutional Court rules on whether his rivals who run the government can change the rules of a referendum which will decide whether he will be impeached.
The ruling Social Liberal Union (USL) of Prime Minister Victor Ponta suspended President Traian Basescu on Friday saying he had overstepped his powers. An impeachment referendum will take place on July 29.
The government wants to change how many votes are needed to impeach Basescu, from a majority of the whole electorate to a majority of those who actually vote - which could determine the result.
The dispute between Ponta's leftist alliance and his right-wing rival Basescu has raised international concerns about respect for the law and the constitution in the European Union's second-poorest country, which is in recession.
The political chaos has raised doubts over Romania's International Monetary Fund (IMF) aid deal, sent the leu currency plunging and pushed borrowing costs higher.
The leu fell a further 0.5 percent on Monday, again trading close to an all-time low.
The court will also rule on whether Basescu's suspension was legal and on a law to cut some of the court's powers after parliament ruled the court could not block some of its decisions.
"The court will meet today from 2pm (1100 GMT) to discuss the constitutional court law, the presidential suspension (and) the referendum law," said court official Daiana Anton said. "We expect a verdict today."
The government had a long list of reasons for suspending Basescu, including what it said was his attempt to pressure judges and breach the constitution.
Basescu said the charges against him were political and an attempt by Ponta to take control of the judiciary.
Romania's president is in charge of the country's foreign policy and nominates the prime minister.
He was able to influence the previous government's austerity policies because of his close links to the centre-right Democrat-Liberal Party, which led that government.
Analysts say the court will almost certainly back Basescu's suspension because it was done according to protocol. But the referendum rule change - passed just weeks before the impeachment vote - may be rejected.
However, in a further complication, Ponta's government has also passed an emergency decree backing its referendum rule law.
So even if the court rejects the law change, it may not be able to overturn the decree - certain to add to international accusations the government is dispensing with the judiciary.
The Council of Europe has already asked constitutional experts to examine the suspension of the president after Germany and the United States criticised the action, saying it threatened the rule of law.
"The long-term damage to Romania's image as a democracy has been already done. So, the leu will remain under pressure for the rest of the year," said a Bucharest foreign exchange dealer.
Romania's politics - unstable at the best of times - have been in chaos for months and Ponta is the third prime minister this year, after protests against austerity and corruption toppled his predecessors.
Ponta's USL backtracked on a plan to replace Constitutional Court judges after international criticism, but is now issuing emergency decrees that take immediate effect before the court can rule on them.
Impeaching Basescu would mean Romania would have to elect a new president in the autumn as well as holding a parliamentary election, which will stall policies and raise expenditure as it tries to keep the 5 billion euro ($6.15 billion) IMF-led aid deal on track.
The USL is favourite to win a parliamentary election in the autumn, though there have been no opinion polls in the past month. If Basescu is impeached, the party would also probably win the presidency.
The government denies it is endangering the rule of law and says it is sticking to the deal with the IMF, which wants Bucharest to overhaul energy prices and the outdated health system and to sell inefficient state assets. ($1 = 0.8126 euros)
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