Irish voters back fiscal treaty in referendum
Yes vote bolsters confidence in government’s funding position
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By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — Policy makers from Brussels to Berlin, not to mention Dublin, likely breathed a big sigh of relief Friday as tallies indicated Irish voters backed a new European Union treaty aimed at forcing national governments to respect the region’s budget rules.
With all constituencies reporting, the final tally saw the “yes” vote at 60.3% versus 39.7% voting “no” in the referendum, according to broadcaster RTE. Turnout was low by Irish standards at 50.6%.
Voters went to the polls on Thursday. Counting began Friday morning and is expected to conclude later in the day.
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The Irish government campaigned hard in favor of the referendum. Failure to approve the pact would have left Ireland, which received an €85 billion ($104.7 billion) bailout in 2010, unable to further tap the euro-zone rescue fund.
“Clearly, a ‘yes’ vote will be key in bolstering confidence in the Irish government’s funding position, given that access to the European Stability Mechanism (ESM) fund is conditional on ratification,” said Conall Mac Coille, an economist at Davy in Dublin.
Ireland’s ISEQ General Index XX:IEGI -2.33% fell 1.6% as European and U.S. equities tumbled in the wake of rising worries about the global economic outlook. The yield on 10-year Irish government bonds IE:10YR_IRE +0.81% rose 0.06 percentage point to 7.45%, according to electronic trading platform Tradeweb.
Economists said that a “no” vote could have triggered further contagion.
But with investors focused on Spain’s faltering attempts to shore up its troubled banks and the potential ramifications of a Greek exit from the euro zone, the scope for relief was limited.
“A ‘yes’ is well priced in,” wrote strategists at UBS.
