Taoiseach Brian Cowen has warned that the scale of Ireland's economic challenges must not be underestimated.
Mr Cowen told the Fianna Fáil parliamentary party seminar in Galway that the credit crunch was continuing to unleash havoc across the world and had inevitably impacted on the Irish economy.
As a result, he said the Government was undertaking a detailed review of current and capital spending, telling TDs and senators that as the Exchequer has less money coming in, there is less to spend.
On housing, he said the Government would help those who want to buy a home but were experiencing difficulties obtaining credit. He said, however, that the Government would avoid any actions that would artificially inflate house prices.
The Taoiseach said he would not mislead anyone by claiming that there would be no impact on individuals and groups arising from what he called 'these necessary adjustments'.
He said the Government has a duty to act in the long term interests of the Irish people.
Fianna Fáil's annual parliamentary party meeting is being held ahead of the resumption of the Dáil.
The agenda at the two-day meeting is dominated by the economy, the fall-out from the Lisbon Treaty Referendum, and preparations for next year's local and European elections.
It is the first time Mr Cowen attends the annual get together as Taoiseach and Fianna Fáil leader.
McGuinness comments 'not view of Govt'
Mr Cowen also distanced himself from comments made by a junior minister about efficiency within the public service this morning.
Minister of State for Trade & Commerce John McGuinness had described the public service as an inert mass that stood in the way of competitiveness.
Speaking at the beginning of today's meeting, Mr Cowen said Mr McGuinness's comments did not reflect the view of Government.
Asked about the timing of the remarks in relation to the national pay talks, the Taoiseach said he had not had advance notice of the minister's speech.
Up to 200 civil servants attended a meeting in Dublin city centre today to protest against the critical remarks by Mr McGuinness.
Civil and Public Service Union representative Eoin Ronayne welcomed the Taoiseach's earlier clarification on the matter but said Mr McGuinness should withdraw his remarks.
Mr Ronayne said the union rejected Minister McGuinness's attack on many committed public servants who earn a fraction of his public service income.
