Fate of EU treaty in balance as Irish vote again

The European Union's hopes of greater global clout centred on Ireland for a second and decisive time time as voting started in a referendum that risked plunging the bloc into crisis if Ireland said "No" again.

Brussels is counting on Ireland to ratify the Lisbon Treaty after the country, accounting for less than 1 percent of the union's near half a billion population, held up the reform charter's introduction in a shock "No" vote last year.

Opinion polls suggest this time around Ireland will pass the treaty after securing concessions from Brussels and amid fears a second dismissal would isolate the country at a time of severe recession but there are fears anti-government sentiment could make the result tight.

"I think it will be a simple reversal of the last vote, so 53 percent 'Yes', 47 percent 'No' on roughly the same turnout," said Hugo Brady, a political analyst at the Centre for European Reform think-tank and a native of Ireland.

A second rejection would severely delay EU integration and further enlargement as well as weaken the euro currency and open the possibility of a two-tier Europe.

The vote has just as wide-ranging implications for Ireland, with analysts warning a second dismissal could sink the country's reputation, losing it valuable goodwill from overseas investors, that it relies on to fund a ballooning budget deficit.

"These are hard times and Ireland needs a Europe which works better to help us," Prime Minister Brian Cowen wrote in an article for today's Irish Sun newspaper.

Economists polled by Reuters estimated on a median basis that the spread between Irish and German 10-year debt would increase by 50 points if the treaty was rejected.

For Cowen, whose leadership has been wounded since the electorate first shunned Lisbon five weeks into his term, another thumbs down could force him to resign and rattle the already shaky centre-left coalition.

"I think it would be very foolish to express any anger at the government in a referendum. That chance will come soon enough," said Anthony Cunningham, 62, an early voter in the leafy Dublin suburb of Booterstown after polls opened at 0600 GMT, adding he had voted "yes" because the Irish economy depended on Europe.

SPOTLIGHT ON PRAGUE

The Lisbon Treaty, which is designed to speed up decision-making in the EU, give it a long-term president and a stronger foreign policy chief, needs to be ratified by all 27 member states in order to take effect.

An Irish thumbs up would put pressure on eurosceptic presidents in Poland and the Czech Republic to follow other EU leaders by signing it into law.

President Lech Kaczynski of Poland has said he will ratify the charter if Ireland votes Yes but President Vaclav Klaus of the Czech Republic is likely to stall his approval after 17 senators filed a constitutional complaint against the treaty.

If the Constitutional Court rejects the latest complaint before a British parliamentary election, which could see the opposition Conservative Party sweep to power and hold a referendum on the treaty, likely sinking it, then Klaus may be forced to sign it into law -- marking the final piece in the ratification puzzle.

"Saturday evening we will be looking at a different EU because most people will calculate that Klaus will sign and therefore the treaty will enter into force, like lightning in EU terms, from January 2010," said Brady.

And Ireland, after months under the spotlight, would bask in the glow of European approval, side-stepping domestic political crisis and boosting its reputation.

"I think that will be the day that Ireland's economic recovery really begins," said Brady.

Voting will close at 2100 GMT and a preliminary result is expected some time after counting starts tomorrow morning.