Taoiseach Brian Cowen has said that the National Develop Plan will not go ahead in all its facets, as it was based on a forecast of 4% economic growth a year.
Speaking on the Marian Finucane show, Mr Cowen said targeted spending would mean significant investment in higher education and research & development.
He said the plan would also target efforts to bring business ideas to fruition in order to develop what he called a smart economy, and so generate jobs.
Fine Gael leader Enda Kenny had called on the Government to scrap the plan, claiming it was filled with 'unachievable' political targets, and amounted to a wish list for every Fianna Fail member in the country.
Responding to comments about reckless lending in the banking sector, Mr Cowen said that there were also governance issues in banking which were now being addressed.
Mr Cowen said that the global economic crisis had shown that membership of the European Union was critical to Ireland's fortunes and survival. He also said that people were concerned at how quickly the change in our economic fortunes had occurred.
The Taoiseach said that in some cases things would get worse before they got better, but added that we could come through this if we made the right decisions now.
