The Tánaiste, Ms Harney, has called for a relaxation of the EU Stability and Growth Pact to enable the Government to borrow more money to fund capital projects.
Ms Harney said it was essential that the rules governing fiscal policy should be seen to work, but she called for flexibility "to maximise Europe's capacity to grow".
She said it was justifiable to borrow because Ireland had a low debt rate.
Rigidities and restrictions in the pact should be used only to prevent states with high debt from borrowing.
Emphasising that she wanted to borrow only for road, transport and telecom projects, she said there would be no return to borrowing for current expenditure. "We're not going back to the borrowing of the 1980s when we nearly went bust," she said.
Ms Harney's comments were an effective endorsement of the appeal by the Economic and Social Research Institute for the Government to take advantage of low interest rates to increase capital investment.
The think-tank has urged the Government to take a lead position on reform of the pact when it assumes the presidency of the EU next January.
However, Ms Harney said she was not seeking to change the rules of the pact. Rather, she wanted flexibility in the manner of their interpretation.
"It's important that we have a fiscal regime that's based on rules and discipline. That's essential I think for monetary union," she said.
Countries with a strong balance sheet such as Ireland should be allowed to interpret the rules differently in order to facilitate borrowing. A relaxation of the regime in the Irish case would not have a negative effect on the broader fiscal situation in Europe, she said.
Ms Harney made her remarks at a Progressive Democrats conference on Europe, where the former director general of the World Trade Organisation, Mr Peter Sutherland, said that eurozone members should be very cautious when considering amendments to the pact.
While Ireland's debt-GDP ratio of 33.6 per cent was among the lowest in the EU, he said there was no reason to go on a spending splurge.
In addition, he said there was a requirement to protect price stability.
Changing the stability pact was not a panacea to lethargic growth in Europe, Mr Sutherland said.
There were "things which should be changed" in the regime, but he warned against capitulating to the demands of bigger states that wanted to use reform of the pact as an alternative to the more fundamental changes required in their domestic economies.
"We have real problems and the gaps in our performance are attributable to Italy, France and Germany," he said.
He criticised the slow pace of labour market reform in Germany and said state subsidies to German business were greater than the government's revenues from corporation tax. It took three weeks a establish a company in the US; the same process took a year in France.
Mr Sutherland said the Government's opposition to Europe-wide tax harmonisation was justified.
Real tax competition would have resulted in converging tax rates in Europe.
"Tax harmonisation won't help to cure continental Europe," he said.
"I just don't see that as creating a viable alternative in terms of the advancement of the European economy."
