TAOISEACH Enda Kenny has said a deal must be struck this week for the EU's seven-year budget.
He said tough negotiations within the European Council lie ahead but leaders must show citizens they can make difficult decisions.
"It is clear to me that tough negotiations will be needed if agreement is to be found," he said.
"Some headway was made at the European Council in November but considerable differences remain. From my contacts with colleagues, however, I believe that there is a shared appreciation that we need to close the deal this week."
Mr Kenny will travel to Brussels today to begin two days of discussions on the budget, known as the multi-annual financial framework.
European Council president Herman Van Rompuy, who will chair the talks, proposed a budget in November of around €972 billion (£839bn) for the period up to 2020.
European Commission leaders had originally proposed €1000bn.
"In setting out his assessment of how matters stand, President Van Rompuy has been clear that he believes further cuts will be necessary to bring everyone on board," Mr Kenny said.
"A main part of our discussion will therefore focus on how big these cuts should be and where they should be applied."
Mr Kenny represented the Re public as EU president at a meeting with Mr Van Rompuy, commission president Jose Manuel Barroso and European Parliament presi-dent Martin Schulz earlier this week to discuss the framework.
Because the Republic holds the EU presidency, it has the responsibility to engage with the parliament to agree an overall budget.
It will also manage around 70 pieces of legislation needed to implement the budget across the EU's many activities.
President Michael D Higgins has said the state intends to make the most of its six-month presidency.
He said the term offers a unique opportunity to contribute to EU's development. He said "urgent and compelling" priorities should be jobs, stability and growth.