There should be no need for Exchequer borrowing in the coming year and employment growth will remain healthy, the Taoiseach predicted at the launch of the National Centre for Partnership and Prosperity yesterday.

But Mr Ahern believed economic growth this year was likely to average 3 to 4 per cent, rather than the higher estimates of the Central Bank and Economic and Social Research Institute.

"We should keep a [Budget] surplus," he said. "But even if we have to go back to negative borrowing we should come back on surplus after a one to two-year blip."

He said he did not expect job losses to offset overall employment growth. He added that he had discussed the situation with financial services employers earlier in the day and their priority remained one of trying to recruit and retain staff.

Nor did he accept that the majority of people were becoming disillusioned with social partnership. "Looking back on 14 years of social partnership we can see that it works," he said.

Ireland had moved from a situation of 980,000 at work to 1.8 million, and from 45,000 people a year leaving Ireland to 25,000 coming into the State.

He accepted there was a serious economic crisis to be tackled, but said: "The stakes are too high for there to be any other response."

"At the same time, I fully appreciate that there is a selling job to be done. For some people at least, partnership in the workplace is an empty formula, divorced from the reality of their everyday lives; or if it is part of that reality, it is something to be endured, or even an obstacle to decision-making in times of rapid change."

The executive chairman of the NCPP, Mr Peter Cassells, was more sombre than the Taoiseach in his assessment.

He said the centre was beginning its activities during a period of economic uncertainty.

Private sector companies were coming under "serious competitive pressures", public services and utilities were undergoing their greatest changes in 150 years and the "general industrial relations climate is more turbulent and uncertain than at any time for more than a decade".

He saw the NCPP's primary aim as ensuring that enterprises, public and private, could adapt to change and ensure living standards continued to rise even if economic growth rates fell.