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* Brussels sees political pressure on Romanian judges
* Says some progress in democratic reforms
* Romania PM says has addressed EU concerns (Adds details from report, government and analyst reaction)
By Justyna Pawlak and Ioana Patran
BRUSSELS/BUCHAREST, Jan 30 (Reuters) - The European Commission rebuked Romania on Wednesday for failing to meet demands to fully uphold the rule of law and told the leftist government of Victor Ponta to speed up reforms.
Since joining the European Union six years ago, Romania has failed to convince the bloc that its justice system and anti-corruption efforts are sufficient. Bucharest is under special EU monitoring and excluded from the passport-free Schengen zone.
The EU's executive said in a report Romania had taken some steps in recent months to safeguard constitutional law, after voicing concern last year that political bickering was undermining democracy in the Black Sea state.
But political pressure on the justice system has continued and anti-corruption prosecutors have been undermined, it said.
"The lack of respect for the independence of the judiciary and the instability faced by judicial institutions remain a source of concern," the European Commission report said.
There is some concern in western Europe that the EU allowed Romania and neighbouring Bulgaria into the bloc too soon. They remain its poorest countries, with per capita wealth less than half the EU average, and are struggling to use money from Brussels to upgrade outdated infrastructure and catch up.
The EU censured Prime Minister Victor Ponta last year for flouting the rule of law in trying to impeach his rival, President Traian Basescu, and it gave the premier a list of specific concerns to be addressed.
These related to respect for Constitutional Court decisions, use of measures to bypass parliament when devising laws, and criticism of judicial decisions, among others.
The Commission said the Bucharest government had addressed some concerns but more work was needed elsewhere, including protecting the judiciary from outside pressure and ensuring that lawmakers and ministers resign when they have conflicts of interest or integrity issues reported against them.
Romania also needed to ensure it appointed a well-respected and independent chief prosecutor and anti-graft prosecutor, the Commission said, after Basescu rejected the first nominations, citing a lack of transparency in the process.
Ponta insisted he had addressed all of the Commission's concerns and his government has denied a lack of transparency in selecting prosecutors.
Tension has eased since Ponta scored a convincing election victory in December, a development the Commission said should ease requested reforms.
That has also buoyed Romanian markets, the leu currency has rebounded from all-time lows hit during the impeachment attempt, and borrowing costs have fallen.
But while the government's relations with Basescu have improved, the confrontational nature of Romanian politics means the feud could easily resume and again raise concerns for the integrity of governance in the EU's second-poorest member state.
"I am quite sceptical regarding short-term improvement of the situation in the justice system considering how the situation is right now," said Adrian Basaraba, professor at the political sciences faculty from West University of Timisoara. (Editing by Mark Heinrich)