Central Bank Governor Professor Patrick Honohan has said that signing up to the fiscal treaty is a safer alternative for Ireland.
In a speech to the Irish Economic Association, Professor Honohan said that for the Government to do otherwise would result in the country turning its back on European co-operation.
He said this had been at the heart of Ireland's considerable economic progress over the last four decades.
However, he acknowledged that the Fiscal Compact does set a tighter set of rules on fiscal policy than in the original Stability and Growth Pact.
He also said that no simple fiscal rule would have prevented “the risky over-dependence on bubble-related tax sources” which led to Ireland's recent collapse.
He pointed out the fact that there was flexibility in terms of whether an excessive deficit exists.
Earlier, the referendum campaign continued with Sinn Féin insisting that a rejection of the treaty would not cut us off from receiving emergency funding.
Union stance
Elsewhere, the country's largest public sector union has become the first union to recommend a Yes vote in the fiscal treaty referendum.
After meeting earlier today, IMPACT's executive wrote to branches informing them of the decision.
General Secretary Shay Cody said a No vote would significantly increase the cost of Irish borrowing and could even cut off the country's ability to borrow at all.
He said that could have dramatic consequences for social welfare benefits, pensions, and public services including pay and employment as well as domestic demand in the economy.
He added those who advocated a No vote had identified no practical alternative source of funds.
So far, three unions - Mandate, UNITE and the TEEU - have advocated a No vote to members.
The country's largest union SIPTU decided it would only back the treaty if the Government implemented a multi-billion euro stimulus and growth package to create jobs.
Yesterday, the Irish Congress of Trade Unions failed to reach consensus on a recommendation about the treaty and decided to leave it up to individual unions to advise their members.
Speeches removed from website
Meanwhile, a number of speeches promoting a Yes vote in the referendum have been removed from the Government's information website on the treaty.
The website - www.stabilitytreaty.ie - originally carried the texts of speeches by the Taoiseach, the Tánaiste, and Minister of State Lucinda Creighton advocating a Yes vote.
One of them was quoted by Socialist Party MEP Paul Murphy at an Oireachtas sub-committee on the treaty, which the Taoiseach appeared at today.
Mr Murphy said it was an example of how the website was not neutral.
A Government spokesman confirmed the texts have been removed to respect the McKenna Judgment.
The judgment bans public funds being used to advocate one side in a referendum.
The spokesman said the judgment comes into force on Monday when the Referendum Order is signed.
He added that the Government made no apology for advocating a position in advance of that.
Elsewhere, Enda Kenny told the committee that a full recovery in Ireland will not be possible without a European recovery.
Mr Kenny said that nobody was claiming the treaty would achieve this on its own.
However, he said it would underpin the policies necessary if recovery is to be secured.
The Taoiseach outlined a number of measures to inform people, such as leaflet distribution, and said that nobody should feel that they do not have the time or the means to know what is involved.
He said he wanted to send a message about Ireland that will resonate around the world.
The referendum on the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union will take place on Thursday 31 May.
