European Commission President José Manuel Barroso has said he was ‘fully confident’ that Ireland would overcome its economic crisis.

Mr Barroso told academics in Cambridge that the decisions the commission was taking to support struggling European states were ‘the right ones’.

Answering questions following a lecture at Cambridge University, Mr Barroso said: ‘I am fully confident that the Irish economy will overcome this situation, which was the result of unprecedented behaviour in the financial sector.’

He told an audience of university staff and students: ‘Overall the European Union is not in a bad position in terms of debt. What we have is a problem in some member states.

‘I believe the decisions we have been taking are the right ones. We have been supporting fully.’

Mr Barroso said there had been ‘strong temptations’ for the European single market to splinter during the economic crisis of recent years.

He said the ‘defence’ of the single market had been an ‘unsung success story’.

‘We managed to defend the single market and keep it open for business. Respect for the rules held firm,’ he said.

‘It would have been so easy for member states to close in on themselves and splinter into 27 mini markets again. There were strong temptations in that direction.

‘The commission took a firm stance to ensure they did not prevail.’

He said the debt crisis had highlighted ‘underlying structural weaknesses’ in some European states but insisted the single market remained ‘Europe's greatest asset’ in the quest for growth and jobs.

But he said the European Union had no intention of becoming a state.

‘We are not a state and we do not intend to be a state,’ he added.

‘The European Union is something new. It is a union of domestic states. I think it is a great construction.’