By Radu-Sorin Marinas
BUCHAREST, March 16 (Reuters) - Romanian prosecutors detained the head of a European Union-backed anti-corruption watchdog on Monday, suspecting him of inflating the value of real estate by 75 million euros ($79 million) in a land restitution scam.
The detention is the latest in a parade of arrests and convictions of high-ranking officials in Romania, one of the EU's most corrupt countries. Finance Minister Darius Valcov resigned on Sunday, accused of taking money in exchange for favours to a business while a provincial mayor.
Prosecutors on Monday detained the head of the National Integrity Agency (ANI), a watchdog set up after Romania joined the EU in 2007 to investigate suspiciously wealthy politicians, which won praise from Brussels but was often resented by MPs.
Unlike the main anti-corruption agency, the DNA, the ANI does not have the power to prosecute.
Prosecutors said ANI head Horia Georgescu would be detained for 24 hours, on the "reasonable suspicion" that he had abused his powers in a previous role at a government agency that restores property seized under Communism to its rightful owners.
Georgescu denied the allegations, according to a statement by his lawyer to Realitatea TV. Valcov also denied wrongdoing.
"Specifically, in (2008-2009), the Central Commission to set property compensation ... part of the National Authority for the Restitution of Property, of which Georgescu was a member, approved evaluation reports for three dossiers ... with over-valued real estate compensation," the DNA said in a statement.
Thousands of Romanians are waiting for compensation for property seized under Communism, which fell in a bloody revolution in 1989 after four decades of dictatorship. Disputes over land ownership, the inefficiency of the judicial system and red tape have hampered efforts to return property.
Widespread corruption has long deterred business in Romania, which is joint last among EU states in Transparency International's corruption perception index. The EU has Romania's justice system under special monitoring, together with that of neighbouring Bulgaria.
Markets shrugged off Valcov's resignation on Monday and analysts said the minister's exit would not derail Romania's fiscal policy aims.
Prime Minister Victor Ponta's government, which faces a general election at the end of next year, has announced proposals for sweeping tax cuts between 2016 and 2019.
Ponta told reporters on Monday that Valcov, one of the architects of the tax proposals, would not be replaced immediately, but that a successor would be appointed after the tax proposals were sent to parliament around March 25. ($1 = 0.9458 euros) (Editing by Matthias Williams and Kevin Liffey)