TAOISEACH Enda Kenny says further spending cuts and tax hikes would have been needed if there wasn't a deal with public sector workers on Croke Park II.
Mr Kenny also said the unions that stayed inside the talks had negotiated significant concessions and the agreement was "one of the most fundamental sets of negotiations" of recent years.
He said the extension of the Croke Park deal up to 2016 would save €300m this year and €1bn over the lifetime of the agreement.
"The only alternative would be to tax and cut more deeply," he said.
Mr Kenny said the country was still going to have to borrow €12bn this year.
"The deficit we have is not going to fix itself, unless we all contribute to that," he said.
"This is an issue for everybody who puts their shoulder to the wheel and makes a contribution. This is a fair and proportionate contribution across the board. Those who pay the most earn the most."
Mr Kenny (left) claimed the frontline services were being protected.
"This is a challenge for everybody and nobody likes that things need to be reduced or cut back, but the trade unions who stayed in discussions did make significant improvements and alterations to the initial proposals," he said.
"And for that, they have protected the frontline services by making adjustments to the negotiations that took place here."