EU in crisis after Irish "No"

By Paul Taylor, European Affairs Editor - Analysis

BRUSSELS (Reuters) - Ireland's rejection of the European Union's reform treaty plunged the bloc into a new crisis of confidence on Friday but other member states appear determined to plough ahead with ratification.

The resounding "No" vote in the only one of the 27 members to put the Lisbon treaty to a referendum highlighted again the EU's inability to make itself attractive to citizens, three years after the French and Dutch rejected the EU constitution.

The euro currency, used by 15 EU states including Ireland, fell to a one-month low against the dollar on first word of the negative vote but recovered the losses later in the day.

The outcome means the treaty that contained all key reforms in the defunct constitution intended to give the EU stronger leadership cannot enter into force as planned on January 1.

Financial markets are worried that the EU is doomed to a new period of self-doubt but do not expect a lasting negative impact on the economy or exchange rates, said Holger Schmieding, an economist at Bank of America in London.

"It's a significant political headache but not a significant economic issue for the time being," he said.

Antonio Missiroli of the European Policy Centre think-tank said the vote sparked a European political crisis that required strong leadership in Ireland, in Brussels and key member states.

In coordinated responses, the leaders of France, Germany and the European Commission called for ratification by the other member states to go ahead and for Ireland to tell a summit next week how the EU can respond to the concerns of the "No" voters.