BRUSSELS: Romania's Prime Minister Victor Ponta said yesterday he will draw the necessary conclusions from a EU report lashing Romania's respect for democratic values, saying the text was "balanced".

"The European Commission report is balanced. Romania will draw the necessary conclusions in order to continue its efforts to build an independent and efficient justice system", Ponta told reporters in Bucharest.

The European Union had sharply criticized Romania yesterday, saying the government has undermined the rule of law and independence of the judiciary in one of the bloc's newest members.

In a scathing progress report addressing political instability in Romania, the EU's executive commission said it was particularly worried by "manipulations which affect institutions (and) members of the judiciary and have a serious impact on society as a whole."

The EU also said recent steps by the government raise concerns about its respect of fundamental democratic principles. It urged Bucharest to take urgent action to demonstrate its commitment.

Prime Minister Victor Ponta's government impeached President Traian Basescu last month, and a national referendum will be held on July 29 to determine whether he should be removed from office.

The government has accused him of meddling in affairs beyond his authority.

Critics have accused Ponta of orchestrating the moves as part of a power grab, and the political turmoil has dented Romania's credibility, with the United States and the EU expressing doubts about the left-leaning government's respect for the independence of the judiciary.

EU officials have been particularly concerned about the speed of the impeachment process and that the government tried to pass emergency decrees to change the referendum law to make it easier to impeach Basescu.

Critics also claim Ponta and his supporters have taken other steps aimed at consolidating control and sidelining the judiciary.

The EU allowed Romania and Bulgaria to join in 2007 despite delays in reforming their judicial systems and combating corruption and organized crime. Since then, it has been issuing regular annual reports on their progress.

Jose Manuel Barroso, president of the European Commission, said over the past three weeks "exceptional events" in Romania had been a source of major concern.

Under pressure from the EU and US, the government has backtracked on changes to the referendum law, although interim President Crin Antonescu has said he has misgivings the law requires a minimum turnout for the Basescu referendum for the vote to be validated. The government has also removed the speakers of Parliament and the country's ombudsman in the space of a few days to make it easier to impeach Basescu.

"Politicians must not try to intimidate judges ahead of decisions or attack judges after decisions they don't like," Barroso told reporters yesterday. He said an additional report would be prepared on Romania before the end of 2012.

"In this report we will look whether our concerns have been addressed," Barroso said.

The commission report said some progress had been made in both Romania and Bulgaria, but it was not yet irreversible.

On Bulgaria, the commission said important progress has been achieved in creating an independent judiciary, and in pursuing organized crime. But a variety of weaknesses still remained, and the fight against high-level corruption and organized crime "still has to show convincing results."

Bulgaria will also remain under EU scrutiny for the time being, the report said.