FINANCE Minister Michael Noonan last night upped the ante on the possible EU referendum, describing it as a vote on being in or out of the euro.
And Taoiseach Enda Kenny said the Government was "not afraid" of holding a referendum.
Mr Noonan said if a referendum was held, it would essentially be a vote on the country's continued membership of the currency.
The minister raised the stakes substantially as the Government tried to work out if a referendum was needed. He reiterated that if the tough new EU budget rules meant a change in the Constitution, a referendum was required.
"If a referendum is necessary, we won't resile from it and we will campaign very strongly in favour of it and we'll explain to the people what the issues are. You know, it really comes down on this occasion to a very simple issue: do you want to continue in the euro or not?
"Faced with that question, I think the Irish people will pass such a referendum," he said. "But it's not certain that we will be required to have a referendum."
Mr Noonan also said Ireland would "give Europe its first success story, as the recession cycle turns".
The minister said the NTMA planned to borrow short-term money in the markets in the second half of next year and would make a full re-entry to the bond market in 2013. This would mean the country would be able to finance itself in 2013 for the first time since the IMF-EU bailout.
Fianna Fail said Mr Noonan's claim about the referendum was "an insult to Irish people's intelligence".
The party's finance spokesman Michael McGrath said Mr Noonan was "scaremongering" and the claim was not based on any sound legal analysis.
"Instead it is a highly political and deliberate attempt to silence legitimate criticism and browbeat those who strongly support euro membership but have genuine concerns about this deal," he said.
"To try now to silence legitimate debate and position the referendum question as a 'Yes' or 'No' on euro membership is a perverse and unacceptable distortion of the facts," he said.
In the wake of the British decision to opt out from the new EU deal, Mr Noonan met with his British counterpart, Chancellor George Osborne, during his visit to London.
Mr Kenny has spoken with British Prime Minister David Cameron in recent days.
Mr Noonan said he has known Mr Osborne since he became Finance Minister.
"We have a good relationship. He always likes to mention his family connections with Tipperary and Waterford and I find him a very friendly and interesting person to do business with," he said.
"Of course we discussed what happened in Europe and he set out his position but the meeting I had was private and I'm not going to be commenting on what he said."