Political uncertainty in the week before the Lisbon vote may have had a small effect on increasing the interest rates the government must pay for borrowing billions of euro abroad. Ireland, Italy and Hungary, which has been led by a caretaker government since March, were the few sovereign countries in Europe to see their interest rates rise last week. Almost every other European country saw a decline in rates.

But political uncertainty is no longer in itself enough to frighten sovereign debt markets – as a country meets its repayment schedule, lenders show little concern.

Take Romania. Despite the break up of its coalition government, ratings agency Standard & Poor's said the political turmoil had had no immediate impact on the sovereign credit ratings. "Despite a tense intra-coalition environment... and particularly ahead of the upcoming presidential elections – the government has so far successfully implemented the country's IMF/EU program..."

In Hungary, S&P said: "The caretaker government under prime minister Gordon Bajnai... has continued the fiscal consolidation course embarked on by its predecessor" and the agency upgraded the outlook for the country to pay its bond debt from "negative" to "stable".

Hungary's budget figures are much better than Ireland's – it is heading for an annual deficit of about 4% of GDP in 2010, compared with over 12% here, and its overall debt burden is likely to reach 78% of GDP while ours reaches for 100% next year. Despite all this, Ireland pays the same interest rate of 4.7% to borrow for 10 years, as Hungary. Go figure.

Political uncertainty in the week before the Lisbon vote may have had a small effect on increasing the interest rates the government must pay for borrowing billions of euro abroad. Ireland, Italy and Hungary, which has been led by a caretaker government since March, were the few sovereign countries in Europe to see their interest rates rise last week. Almost every other European country saw a decline in rates.

But political uncertainty is no longer in itself enough to frighten sovereign debt markets – as a country meets its repayment schedule, lenders show little concern.

Take Romania. Despite the break up of its coalition government, ratings agency Standard & Poor's said the political turmoil had had no immediate impact on the sovereign credit ratings. "Despite a tense intra-coalition environment... and particularly ahead of the upcoming presidential elections – the government has so far successfully implemented the country's IMF/EU program..."

In Hungary, S&P said: "The caretaker government under prime minister Gordon Bajnai... has continued the fiscal consolidation course embarked on by its predecessor" and the agency upgraded the outlook for the country to pay its bond debt from "negative" to "stable".

Hungary's budget figures are much better than Ireland's – it is heading for an annual deficit of about 4% of GDP in 2010, compared with over 12% here, and its overall debt burden is likely to reach 78% of GDP while ours reaches for 100% next year. Despite all this, Ireland pays the same interest rate of 4.7% to borrow for 10 years, as Hungary. Go figure.