The euro dipped this morning as news broke that Ireland's voters rejected the EU Lisbon Treaty in yesterday's national referendum. Although the Treaty's fate has no direct economic impact on the EU, the resulting uncertainty will add to market anxiety over more pressing issues like rising inflation, oil price protests, and looming recessions in Spain and even Ireland. The "no" will certainly embolden euro-skeptics in other countries, and does present the EU with a significant political headache. The Lisbon Treaty - which replaces the EU constitution that was rejected by voters in France and Netherlands back in 2005 - is supposed to make the 27-member EU more effective and streamlined. It has to be ratified by all members, but Ireland is the only one to hold a national referendum. So far, 14 countries have approved the Treaty in parliamentary votes. A rejection from the generally pro-Europe Irish is also a political headache for the UK's PM Brown. Already weakened politically, facing down calls for a similar popular referendum in the UK will further undermine the PM. The biggest headache of all is for Irish PM Cowen, who will be called to account by fellow EU leaders at next week's summit. Re-negotiating the whole Treaty is off the table, and a re-run of 2001 - when Ireland rejected the Nice Treaty on EU expansion, then staged a second and successful referendum some months later - is unlikely this time around. For now, collective wisdom suggests the remaining 12 EU members will proceed with ratifying the Treaty, while the mandarins come up with a special solution for Ireland, perhaps a series of opt outs or assurances that can be put to the voters. The whole process will be a major distraction at a time of real economic and political challenges. And, whatever the solution, it will only add to the popular perception that EU leaders are oblivious to the concerns of ordinary voters.