The Taoiseach blamed the €1.3 billion shortfall in the Government’s forecast of tax revenue on the current international downturn.
He said "the fact is, that what has happened here is exactly what’s happening everywhere else right across the globe."
"The fact that exports are not feeding into the international markets has effected revenues," he added.
Speaking about the economy he said "we have to manage it, its going to require prudent tight managing of the public finances, that’s what this government will do."
The Taoiseach also defended the special savings scheme saying "one of the big worries that we’ve had for the last decade is that savings in our society have been at a threshold that was almost dangerous.
It is never good in an economy where a whole generation of people are moving away from savings while it will create some short-term dificulties in the long term it will be a very good thing."
The controversial special savings scheme will cost €425 million this year - €170 million more than forecast - and €500 million a year from 2003.
Earlier today the Tainaiste said the Taoiseach had given her assurances that no serving cabinet minister had received payments. When asked about these assurances the Taoiseach refused to comment saying "I’ve answered all those things severl times this week."