Moody's says Irish treaty vote credit negative

* Ireland could be left isolated if voters say no

(Reuters) - Ireland's decision to put Europe's new fiscal treaty to a referendum could damage its credit rating as a rejection by voters would block the country's access to a second bailout, ratings agency Moody's said on Monday.

Prime Minister Enda Kenny last week called a referendum on the treaty to tighten budget rules in the European Union, with a vote likely to be held in May or June.

A rejection of the treaty would disqualify Ireland from tapping the funds of the European Stability Mechanism (ESM), the euro zone's permanent bailout fund, cutting off a potential source of funds once its EU-IMF bailout runs out at the end of 2013, the agency said.



"The move to take the treaty to a referendum is credit negative for Ireland as rejection would cause Ireland to not be able to ratify the treaty and lose the ESM safety net," Moody's said in its weekly credit outlook.

The agency said Ireland would likely need to rely on the ESM at least partially after 2013.

A rejection could also isolate Ireland, which is so far the only country to put the treaty to a public vote.

Irish voters have twice rejected changes to European Union treaties before voting through amended versions. But Prime Minister Kenny on Monday confirmed there would be no second vote.

"Once the people make their choice, that's it," he told journalists.

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