I must admit it was the headline on this one caught my eye… The core of the claim by Alan Aherne is that a No vote would adversely affect Ireland’s standing the international bond markets:
Addressing a gathering in Dublin of economists recommending a Yes vote, Dr Ahearne said the markets are fairly confident that Irish voters will vote in favour of the treaty on October 2nd. The opposite result would, therefore, automatically damage sentiment, leading to higher borrowing costs for the State and for banks, he told the Economists for Europe seminar.
Ireland has already paid a tribute in voting No last year. I would not able to quantify it. But it was real.
I dont think many investors would have dumped Irish government bonds on account of the No vote alone. The cost of borrowing did not of course jump dramatically on 13 June 2008.
The far bigger tribute was paid some months later, coming on top of a number of other significant negatives. The banks crisis (and its mishandling), along with the prospects of persistently wide budget deficits over the coming years, was of course the major culprit for the severe cheapening of Irish bonds.