TAOISEACH BRIAN Cowen has said tough choices will have to be made in tomorrow's budget.
Mr Cowen said "clearly there are decisions we have to take that we would rather not find it necessary to have to take but we have to take them".
Speaking to reporters after the annual Fianna Fáil Wolfe Tone commemoration at Bodenstown, Co Kildare, he also emphasised the need to take the right policy decisions in the "long-term interests of the country" because "this won't be fixed overnight".
He signalled for the budget "a public capital programme that will build up the capacity of the programme that will make us more competitive and obviously also to have a taxation system that will assist us in having sustainable fiscal ability going forward".
Minister for Finance Brian Lenihan, who was more upbeat about the budget, told reporters: "I think we've reasons to be optimistic in the sense that we can take account of where we are and set out a clear framework for the future."
The Minister added: "We have nothing to fear but fear itself. There's no reason to be worried about Tuesday."
In his speech to some 300 people gathered to commemorate the leader of the United Irishmen who is buried at Bodenstown, Mr Cowen said it was "the greatest economic crisis to face the world in over a generation".
Republicanism continued to be relevant to the current economic climate, he said, "particularly in relation to how it stresses long-term solutions even where these require short-term sacrifice".
The question was "will we act for the long term even where this requires tough and unpopular measures? Or will we take the soft option of focusing merely on the short term and thereby avoid hard decisions in the hope that problems will simply disappear"?
Linking the post-Lisbon problem and the worldwide financial crisis, the Taoiseach said "in today's increasingly globalised era, we should recognise that independence cannot mean isolation.
"We advance our interests not by going solo but by working with like-minded others on problems . . . It is in this way that our membership of the EU in particular will best serve the interests of Ireland and the Irish people in the decades ahead," he said.
Mr Cowen stressed the need to "engage our EU partners on how they would be prepared to allay" Ireland's concerns.
"We need to have the maturity to accept that pooling our sovereignty with others is not the same as giving it away."
The Taoiseach added: "We're in a new economic situation and it's very important that we bring a stabilisation to this situation and chart a pathway back to economic recovery in the coming years and that's what we intend to do.
"On behalf of the taxpayer we have to bring forward a budget as part of a process of adjustment and correction and recovery in the months and the years ahead," he added.
The years of unprecedented growth were "not in prospect in the immediate period ahead. We have to adjust our arrangements accordingly but still keep making the right strategic decisions".
The Taoiseach said of talks with the European Commission about the State's bank guarantee scheme: "We're still in discussions . . . and should hopefully finalise it in the next couple of days."
Asked about the impact of the scheme, he said: "Obviously we have a situation where our banking system is not faced with the very difficult situation they were facing on the 29th September . . . the quicker we get a situation where stability comes to the financial markets the better".
