EU leaders believe the energy crisis could be "1973, 1979 and 2022 all in one in terms of the potential impact on the global economy," Taoiseach Micheál Martin has warned.
Asked whether a mini-budget could take place before autumn to offset the energy crisis risks, the he added: "I don't anticipate that, no."
Speaking to reporters on the final day of the EU's informal summit in Cyprus, Mr Martin said that "speaker after speaker" raised concerns during a working dinner of leaders yesterday evening.
The Fianna Fáil leader said there is "a lot of pessimism" among EU leaders "in terms of the potential medium-term impact of the war on supply and on prices in particular", including "the knock-on impact on economies in Europe and across the world".
"There is quite a lot of pessimism if there isn't an end to this war, and the European Commission and others are saying you've got to keep funding in reserve if the situation gets worse and deteriorates," he said.
"Please God it doesn't, but we've got to be conscious of the fact the impacts of this oil shock could be more medium-term to longer-term, and all last night speaker after speaker were quoting the IEA [the International Energy Agency] saying this is 1973, 1979 and 2022 all in one in terms of potential impact on global economy."
The Taoiseach said Department of Finance officials have predicted that "notwithstanding a worst case scenario we'll still grow" but warned "we're not immune to a downgrading of economic growth".
He added that while there have been calls to spend money that is in reserve now "all of our surplus is currently being invested" in future initiatives such as off-shore wind energy, housing and other energy projects, arguing "so it's not as if the money is waiting there to be used".
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Ukraine loan sends signal on EU commitment, says Martin
Mr Martin also said he "can't be overly confident" about the three-week ceasefire extension between Israel and Lebanon given repeated "violations" of previous ceasefires in the conflict zone.
"I don't want to reveal everything in meeting that is discussed in a confidential way, but [during a working dinner of EU leaders on Thursday evening] I did raise that Europe's relationship with Israel has to come under the microscope in terms of what I believe has been reckless behaviour and shocking attacks on civilian infrastructure," he said.
Mr Martin also said the "Hezbollah rockets into Israel have to stop" and that what he believes Lebanon needs is for all influential groups to "support and help" the Lebanese government rather than be involved in "endless attacks on civilian infrastructure".
The second and final day of the meeting began in Lefkosia with a meeting of the European Council, ahead of a meeting of EU leaders with the presidents of Lebanon, Egypt, Syria, and the crown prince of Jordan.
The discussion is expected to focus on the latest situation in the Middle East, and the ongoing Strait of Hormuz crisis.
Among other topics due to be raised today will be the European Commission's proposed €1.8 trillion multi-annual budget, which is likely to form a key part of Ireland's EU presidency term when it begins in July.
The seven-year budget, known as the multi-annual financial framework [MFF], has been put forward as a way to better plan the EU's finances.
EU officials want to have the plan agreed before the start of next year and before the French elections in early 2027.
However, it has yet to be finalised, meaning it will form a central part of Ireland's work during our six month EU presidency in the second half of this year.
'No Russians in the room' - Tusk
Polish Prime Minister Donald Tusk quipped that there were finally "no Russians in the room", as Hungary's Kremlin-friendly premier Viktor Orban skipped the meeting after his crushing election loss.
Mr Orban - who is set to leave office next month after 16 years in power - has been accused by critics of acting as a Trojan horse for the Kremlin at the EU's top table as he disrupted support for Ukraine.
"For the first time in years there were no Russians in the room, if you know what I mean," Mr Tusk told journalists as he arrived at the summit venue in Cyprus.
During Hungary's bitterly fought election campaign, a string of leaks emerged highlighting the extremely cosy links between top officials in Budapest and Moscow.
That included a phone call in which Hungarian foreign minister Peter Szijjarto briefed his Russian counterpart Sergei Lavrov on EU summit discussions and offered to share confidential documents. The leaks sparked outrage among Hungary's EU counterparts.
EU officials hope Mr Orban's looming exit will ease decision making in the bloc after years of blockages.
In the wake of his election loss, the EU has already scored a breakthrough on Ukraine as Budapest dropped its veto on a massive loan for Kyiv.
Some EU leaders, however, have cautioned against getting too carried away - and warned others could fill Mr Orban's shoes.
"There is a little bit too much euphoria about the fact that Viktor is no longer there. In my experience, I've been here for a year and a half, he was, of course, often a difficult partner, but never an impossible partner," said Belgian Prime Minister Bart De Wever.
"We'll find out in the next few months, but I do think that maybe some things towards Ukraine will become possible that have been very difficult up till now."
Additional reporting AFP
