PUBLIC SPENDING will be sharply restrained in next month's budget, the Taoiseach has warned, offering the clearest signal yet that it will include painful measures.
Speaking to the Fianna Fáil parliamentary party in Galway, Brian Cowen said the current economic challenges would not be easy to overcome and easy solutions did not exist.
Setting out the difficulties facing the exchequer, the Taoiseach said Ireland had been "hit by a confluence of significant woes, some local and some international".
But he rejected the Opposition's charge that the Government, particularly because of its focus on construction, is responsible for tax shortfalls. "Hindsight is a wonderful gift but it is a mythical one. You can only make choices on the basis of the best information available to you at a point in time.
"The Government will have to take tough decisions because of the economic slowdown. No politician likes doing so but we are not going to try to buy short-term popularity and put at risk all the gains of the past decade. By taking the right decisions, we will actively protect the interests of all the people of Ireland now and also be ready to benefit from any economic upturn when it comes," he said.
During its two-day meeting in Galway, the FF parliamentary party is being exposed to a series of economic briefings that clearly outline the difficulties ahead.
Later, Mr Cowen, attending the meeting for the first time as Taoiseach, made it clear that FF TDs will have to show "solidarity" in coming months in the face of criticism about cutbacks.
"No one should underestimate the scale of the challenge that faces us. We are in new economic territory. No one should think that it will be easy to overcome and no one should think that any politician, any economist or any leading figure in business has the easy solution.
"This is far too serious to simply be a political challenge, a political battle to be won." The Government's job was "to plot the right course".
Emphasising the global nature of the crisis, he said: "In recent months we have been analysing the new economic situation that has emerged. We have been hit by a confluence of significant economic woes, some local and some international, and we needed to understand them and assess what they mean for Ireland. Facile analysis won't provide any good solutions.
"The credit crisis continues to unleash havoc in industries and countries right the way across the world. The very existence of some of the biggest names in global financial services is now under threat. This is a storm beyond the initial expectations of policymakers everywhere and its effects are being felt in homes and businesses the world over," he went on.
Pointing to the outcome of the Lisbon Treaty referendum defeat, Mr Cowen issued a coded message to voters that Ireland should not make its life more difficult than it needs to be.
"It's important, when things are as difficult as they are and when the reasons are as numerous and as complex as they are, that we do everything possible to maintain confidence and sustain investment at this difficult time," he said.
"It is increasingly obvious to me that our economic difficulties and the political dilemma posed by the Lisbon Treaty are linked. We failed to address some people's genuinely held concerns and we failed to get the message through that a rejection of the treaty could exacerbate the already tough economic situation we find ourselves in. We need to address these failings in getting more of the people to see the imperative for Ireland to be fully engaged with our partners in the European Union," said the Taoiseach.
