NEW YORK, June 30: Markets applauded Europe's steps to move toward a closer union - but it's not clear European voters are going to play along.

That worries investors, particularly when Europe appears more deeply divided than at any time since the common currency was introduced in 1999.

Europe’s decision to bend its aid rules to help Italy and Spain and move toward creating a common bank supervisor pushed it a step closer to a tighter union.

Yet even if European leaders can put aside past differences and start building a United States of Europe, voters may resist what they see as a loss of sovereignty. That may rebound on markets if a lot of effort goes wasted.

“A lot of people in Europe don't want to be part of one country,” said Simon Pryke, chief investment officer at Newton Investment

Management in London, which oversees about $80 billion in assets.  “There’s a disconnect between politicians and the electorate. They are pulling in opposite directions.”

Sweeping spending cuts and tax increases to reduce large budget deficits have provoked a backlash from Europeans across the 17-country currency union, particularly in countries with high jobless rates and low or negative growth.

Sizable minorities in recent French and Greek elections plumped for far-right or far-left parties rather than mainstream ones committed to European integration.—Reuters