Uneasy markets keep a close eye on referendum outcome

ALL the attention of the international financial markets will be on Ireland in the week ahead. The referendum on the Treaty of Nice is attracting sizeable interest both at home and abroad, interest that is only likely to intensify as we approach next Saturday.

Many international institutional investors have undertaken sizeable investments in the ten accession countries, in anticipation of the benefits membership of the European Union will undoubtedly bring. The market is now concerned a No vote will delay the timetable for expansion, and of course devalue those investments.

The general consensus in the market is that a Yes vote will see the euro, European bonds and European equity markets rise, as it will be seen as a positive step toward the strengthening of the EU. As the Union becomes stronger, the economic power of the eurozone as a trading bloc will strengthen, enabling Europe as a market to challenge the USA's dominance of the global economy.