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Romanian Justice Minister Florin Iordache walks after delivering a speech following his resignation in Bucharest, Romania February 9, 2017. Inquam Photos/Octav Ganea/ via REUTERS

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BUCHAREST (Reuters) - Romania's governing coalition proposed a new justice minister on Wednesday as part of a cabinet reshuffle it hopes will draw a line under a period of upheaval triggered by a decree on graft that it was later forced to scrap.

The decree would have decriminalized several graft offences, effectively shielding dozens of public officials from prosecution. Its architect, Florin Iordache, quit as justice minister after mass protests involving at least half a million people and criticism from the European Union.

The leadership of the ruling Social Democrat Party and its junior coalition partner ALDE, who have been in power little more than a month, named Tudorel Toader as Iordache's replacement.

Toader, 56, is the chancellor of Iasi university and a former judge of the constitutional court. He is also a member of the Venice Commission, the Council of Europe's advisory body on constitutional matters.

The leader of the ruling Social Democrats, Liviu Dragnea, said Toader would not be required to join the party.

Also in the reshuffle, the coalition proposed that Economy Minister Alexandru Petrescu take over the trade and business portfolio after the previous minister, Florin Jianu, resigned over the graft decree before it was rescinded.

Romania's President Klaus Iohannis, a former centre-right politician and a strong critic of the graft decree, must still approve the new ministers. Iohannis plans to hold a national referendum over anti-corruption reforms.

Romania is one of the EU's most corrupt states and Bruseels keeps its justice system under special monitoring. It has repeatedly praised prosecutors and magistrates for their efforts to stamp out corruption, but has underlined a pattern of politicians trying to weaken the anti-graft drive.

In a bi-annual country report released on Wednesday, the European Commission said: "The irreversibility of progress in the fight against corruption was recently put at risk. Corruption persists at all levels and remains an obstacle for doing business."

(Reporting by Luiza Ilie; Editing by Gareth Jones)

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