Spending cuts and tax increases are the last things European economies need, according to the Minister for European Affairs.
Helen Mc Entee says the current crisis is different to the 2008 financial crisis because Ireland is not facing it alone.
She has acknowledged criticisms of the slow response of the European Commission but says it is now acting decisively.
Minister McEntee says there needs to be a long term plan to manage the situation.
"Fiscally prudent doesn't mean austerity, it shouldn't necessarily mean having to impose massive cuts and huge tax increases on citizens," Minister McEntee says.
"I think that is the last thing that we want to do and it is certainly the last thing that other member states want to do.
"But we have to make sure that we have a longer-term plan, that we don't just keep spending that we don't just keep borrowing, that these flexibilities are not there indefinitely," she says.