Central Bank Governor Professor Patrick Honohan has this evening given a speech arguing in favour of the fiscal treaty.

He 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 have done otherwise would have resulted 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.

The Central Bank boss also called on Europe to focus on boosting growth and tackling unemployment as the fastest way to address the continent's debt and deficit problems.

European co-operation "must emphasise a growth and employment focus which, if successful, could have the effect of dissolving debt and deficit problems faster than anything else'', he said.