Brian Cowen, has signalled that "tough decisions" will be taken in tomorrow's crunch Irish Budget in an effort to reignite the Republic’s failing economy.
Insisting that the Government would not shy away from making unpopular decisions and implementing short-term sacrifices, Mr Cowen said Ireland was now engulfed in the "greatest economic crisis to face the world in over a generation".
He said: “Clearly, there are decisions we will have to take which we would rather it were not necessary to have to take but they have to be taken.
"This won't be fixed overnight. This is an issue that has to be resolved over time with the right policy positions being taken and we can try and maintain public services to the greatest extent possible."
Given the extent of the economic downturn, the former Irish Finance Minister said families and businesses were now making the necessary arrangements to deal with the current financial realities.
"We all have to recognise that the situation has changed,” he said.
“Let's not underestimate our capacity to deal with this issue either. Our own people have shown a tremendous capacity to deal with adversity in the past.
"We've had many years of unprecedented and unparalleled and continuous growth.
“That is not in prospect in the immediate period ahead. We have to adjust our arrangements accordingly but keep making the right strategic decisions."
In a wide-ranging address before ministers and Fianna Fail members at the annual Wolfe Tone commemoration at Bodenstown in Co Kildare, Mr Cowen said the prevailing question for the Government was whether it should act in the long-term interests of the country, even if this meant taking tough and unpopular decisions.
"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?" he asked.
Mr Cowen said history showed the only way to deliver long-term economic and social improvements was to do whatever is required to ensure economic and fiscal stability.
"I don't believe that the Irish people would want us to shy away from the difficult decisions we must now make," he added. “We will make the necessary tough choices so that we can chart a course for economic renewal to bring us beyond the current short-term difficulties towards a stable long-term growth rate."
The Taoiseach further insisted that the best way for Ireland to prosper economically and socially was within the European Union. Membership of the eurozone had provided Ireland with "significant advantages", he said.