The Governor General of the Central Bank, Patrick Honohan, said the announcement by the ECB President would have benefits both for Ireland and the whole of the euro area.

ECB boss Mario Draghi said yesterday that the bank would make a new effort to buy Government bonds to drive down the high borrowing rates squeezing indebted governments.

He also urged euro zone leaders to use their bailout fund to do the same.

Professor Honohan said Mr Draghi's comments were complex and it would take time for the markets to absorb them.

He said the Irish Government could not take its foot off the pedal in delivering fiscal and budgetary adjustments. He said there had to be complementary fiscal action to monetary action.

The Central Bank boss said there was lower economic activity in Europe because of tensions in the euro area. However, he said getting our money markets functioning again would see better overall benefits in the future.