Minister for Finance Michael Noonan has told the Dáil it would be "difficult" for Ireland to pay the next €3.1 billion installment of the promissory notes due at the end of March.
However Mr Noonan said he was "still confident of a positive outcome" to negotiations with the ECB.
He was responded to a question from Sinn Féin's Pearse Doherty, who said the State was not in a position to pay the €3.1bn and the Government should tell the ECB that.
He referred to the negotiations as "pussyfooting" and said Ireland should be seeking a write-down of debt, not an extension of the term for paying it back.
Mr Doherty also asked for details of whether the ECB had rejected a proposal, if an alternative proposal would be ready for the next meeting of the ECB board; and what the Government would regard as a satisfactory outcome.
Mr Noonan said it would not be helpful to go into detail, and accused Sinn Féin of positioning itself to reject whatever deal was agreed.
He reiterated his expectation of a deal on the note in the coming weeks and said it was his belief that the Government will get a satisfactory arrangement by the 31 March deadline.