Cowen calls for unity to fight recession

Taoiseach Brian Cowen has said the Government and social partners would draw up a plan of economic renewal to help pull the country out of recession.

At last night's annual Cairde Fáil Dinner, Mr Cowen said the objective of the plan would be to kick start the economy and set it on a path to recovery.

Mr Cowen was forced to accept this week that the crisis in the state's finances was worse than budget forecasts, after figures revealed the Government was almost €8bn in the red.

"The objective of this plan must be to reposition the economy and set out a path to economic recovery," Mr Cowen said.

The Taoiseach said the only way to deal with the worsening financial situation was to work together.

"The social partnership model has served Ireland well," he said. "It helped this country emerge from the dark days of 1980s.

"And it was central to a sustained period of record economic growth."

He said in a period of international turmoil these lessons must be remembered as the country works towards developing public services with less money at hand.

Mr Cowen said Government ministers would act swiftly and decisively to plug the gap between spending and income.

He added a major review of public spending was already under way.

"Our tax revenues are down by nearly €8bn," he said.

"This means we are budgeting for services in 2009 on the basis of a tax take equivalent to 2005.

"That is not a sustainable position into the future."