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Protesters display the Romanian national flag colours during a demonstration in front of the government building in Bucharest, Romania, February 12, 2017. Inquam Photos/Liviu Florin Albei via REUTERS

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BRUSSELS (Reuters) - The European Commission welcomed on Thursday as a "very good step" the decision of the Romanian government to repeal a decree that would have decriminalised graft, and offered Bucharest assistance and funds to improve the country's prisons.

The one-month-old cabinet of Prime Minister Sorin Grindeanu enraged voters when it quietly approved emergency decree two weeks ago that would have decriminalised several corruption offences, prompting the largest display of popular anger since the fall of communism in 1989.

After the protests, the decree was repealed and its main architect, Justice Minister Florin Iordache, resigned.

"I really welcome the fact that the emergency order has been repealed. It is a very good step," the European Commission vice president Frans Timmermans told a news conference in Brussels after a meeting Grindeanu.

Timmermans, who had warned Romania not to backtrack in the fight against corruption after the graft decree was approved, urged the country to continue tackling graft and to involve the civil society in the reform of its corruption laws.

He also offered Romania EU assistance to improve the prison system, saying EU funds could be used for that purpose. The Social Democrat-led government had argued that the decriminalisation of some graft offences would have reduced overcrowding in the country's jails.

Speaking at the same news conference, Grindeanu committed to new reforms and said he will work to make sure the EU's monitoring of Romania's judicial sector and anti-graft legislation would no longer be needed by 2019, when the country takes over the EU presidency for the first time since it joined the bloc in 2007.

Grindeanu also said he will propose next week a new justice minister, who is likely to be picked from "outside the political sphere", he told journalists.

(Reporting by Francesco Guarascio; Editing by Dominic Evans)

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