The Taoiseach told the Dáil today that the European Commission had not decided on the four-year budgetary adjustment target of €15 billion.
Responding to questions from Fine Gael leader Enda Kenny, Mr Cowen said Dublin and not Brussels had made the decision on the figure the Government yesterday said would need to be saved to reduce the deficit from 14.4 to 3 per cent by 2014.
He said most of the savings for 2011 will be reached through cuts in spending instead of new taxes and warned nobody can escape the harsh measures.
Mr Cowen, speaking at the beginning of a two day debate on the economy, said he expects the economy to grow at an average annual rate of 2.75 per cent between now and 2014.
The Taoiseach said the economy needed correction to put it on a sustainable path and warned that heavy cuts may slow growth in 2011. However, these measures would give confidence to international markets, he added
“It is severe but is a necessary next step to economic recovery,” Mr Cowen said. “The challenges can be met and overcome.”
He said if the economy grew at a higher rate than expected the level of cutbacks and tax increases would not be as severe.
Fine Gael finance spokesman Michael Noonan queried if a saving of €6 billion would be sought in the 2011 budget given as the Government had initially sought to cut €3 billion when the overall target stood at €7.5 billion.
Minister for Finance Brian Lenihan said the four year plan would involve “a significant element” of frontloading in 2011. "If we delay action, problems will not only remain - but worsen," he said.
Mr Lenihan said the plan – to be published by mid-November - would include fiscal targets, details of expenditure and tax adjustments, and a mechanism opening it to change. He said he hoped it would put the State on a "pathway to sustainable increases in living standards".
He insisted the Government had acted swiftly to deal with each episode of the crisis as it has unfolded and that “after experiencing an unprecedented shock” to the economy “we have stabilised the public finances”.
Earlier, Mr Kenny said depression, anxiety and fear stalked the land because of the catastrophic failure of the Government to handle the economy.
He said it would be wrong not to recognise there are no painless solutions to the crisis and that everyone would experience pain to undo the damage done by the Government.
Labour leader Eamon Gilmore said there was a lack of information about how the savings would be reached and the four year plan, and he accused the Government of not furnishing all available information to the Opposition during recent briefings.
Mr Gilmore said the Government had said Ireland had the cheapest bank bailout in the world and had already seen the last of the really difficult budgets. “We had been told we only needed one more push. We had been told we had turned the corner. Some corner.”
He said growth forecast had not yet been made available nor had the proposed savings generated by the Croke Park agreement, the template for the four year plan or how the bank bailout would be treated in the national accounts and how that will affect the deficit target.
“The horrifying thought is that this might actually be the kind of information that has been used to inform Cabinet decisions over the past few years. [Or] Fianna Fail is genuinely uncertain about these key figures, which would be extraordinary after more than 13 years in office,” Mr Gilmore said.
Mr Lenihan later insisted all material would be made available and that the Government plan would not be lacking in credibility.
Addressing the Minister, Labour finance spokeswoman Joan Burton said: "You're adverse to new ideas, and to changes, because you are addicted to whatever happened when you were in your salad days of having lots of money to throw at everything. But those days are gone . . . what we need is realistic, fresh hope that turns this economy around.
"What depresses me about the speeches today is 'oh yes' to the smart economy, but where is the smart government?, where is the inspirational government?, where are you giving leadership to in particular the public service?"
Green Party leader John Gormley said talks on reducing the deficit had been difficult as it was not enough to say a target must be achieved without agreeing a road map to bring the State forward. He said the proposals, when published, would serve to maintain the confidence of the European Union and international money markets. “It is crucial to protect and reassert our independence,” he said.
Mr Gormley said spending cuts and revenue raising projects must be fair and impact most on those who could afford it. He said no Government department would be immune.
He also said he would like to see changes to ministerial transport arrangements and TD salaries and expenses.
Sinn Féin Dáil leader Caoimhghín Ó Caoláin said up to €600 million could be saved in the health service without cutting patient services. He called for the “elimination of waste” such as paying over the odds for drugs and the end of overspending on property rentals.
Mr Ó Caoláin also accused the Government of caring more about bondholders than citizens.
Party colleague Arthur Morgan accused the Government of betraying the trust of the Irish people. "The Government decisions . . . particularly over the last two years really do, in my view, constitute economic treason," he said.
"The consensus parties are preparing to impoverish the poorer people of this State for decades, and the Government have no mandate to do so."
Separately today, Central Bank governor Patrick Honohan said significant savings would be needed even if the Government did not have to bail out the banks.
Mr Honohan said dealing with the bank-related debt accounts for 1 per cent of gross domestic product, or the value of the economy - a tenth of the projected 2011 deficit.