Taoiseach Enda Kenny has welcomed co-ordinated action from banks around the world to boost liquidity in the European markets.

Mr Kenny, who earlier warned in the Dáil of a real and present danger surrounding the deepening euro zone crisis and collapse of the euro, said the moves had already taken effect.

The European Central Bank (ECB) announced it would take action with other major institutions to reduce the price of its dollar swap with the US Federal Reserve to provide more liquidity.

“I understand that there has been an initial reaction that has been very beneficial for markets, though we’ve had that in the past,” said Mr Kenny. “But it is welcome. It leads now to a real focus by political leaders on the political crisis in the euro zone, and I hope that the deliberations over the next week will lead to a point where there can be clarity and decisiveness about this, because it is so important for every country in the euro zone, the EU and beyond.”

Mr Kenny added that he believed the euro could be saved.

“I’m a believer in politics and in making decisions,” he said. “I believe personally it can be saved and it will be saved. It requires more decisiveness and clarity and courage in making decisions here.”

The ECB revealed it, along with the Federal Reserve and central banks of England, Japan, Canada and Switzerland, will pump billions into the world financial system through the co-ordinated action plan.

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” a spokesman said.

The plan, which will see dollars made available at cheap rates from next Monday, has already increased confidence in the stock markets.

Speaking this evening, Mr Kenny said he looked forward to proposals for stronger governance in the euro zone to be presented by the president of the European Council.

"However, to tackle the immediate crisis, the first priority must be to use the existing instruments and decisions to their full potential so that the markets can be convinced that European leaders are fully committed to defending and protecting their currency," the Taoiseach told the Financial Services Ireland annual dinner.

"The Government has been consistent in arguing that the only way to overcome a financial market panic like this is to deploy overwhelming financial firepower to support countries pursuing sound economic policies.

"That is why I believe that the ECB needs to play a bigger role in resolving this crisis. Promoting financial market stability and combating inflation should not be viewed as inconsistent goals," Mr Kenny said.

"It is clear that the markets have viewed recent agreements to bolster up the EFSF as unsatisfactory in dealing with Europe’s debt crisis."

Earlier, The Taoiseach told the Dáil the euro zone debt crisis was an issue of real concern in every country in the euro zone and beyond.

“This is a matter of the highest concern and urgency,” he said this morning. “There is a real and present sense of danger, with many openly suggesting that the very future of the currency as we know it is at stake.”

He said political leadership would have to deal with the issue at the summit of euro zone leaders on December 9th. “I have very clear views about what needs to be done, politically, and I will not be afraid to express them on behalf of this country when I get out there," he added.

The ECB's involvement, one way or another, would provide “an effective and credible back-stop and firewall, as they call it, for countries where contagion exists", he said.

"The House will appreciate how damaging this continuing situation is for Ireland," added Mr Kenny. "A stable euro zone is a vital national interest for Ireland and its future.”

Mr Kenny also insisted the Government would not change its budget targets.

Fianna Fáil leader Micheál Martin said the Government’s policy was a case of “Ireland standing idly by while Rome burns".

He added that the time for "ducking and diving" was over. “There is no sense of any inclusive discussion, or indeed negotiation, no sense of Ireland putting forward any ideas, proposals or suggestions," he added.

He asked if the Government had contingency plans for a worst case scenario. “People are now talking of a crisis turning into a catastrophe," he added.

Additional reporting PA