The Taoiseach said that "the fundamentals of the Irish economy are far stronger than they were in previous decades".
What is needed now is "calm consideration of what action should be taken".
Cowen added that Minister for Finance Brian Lenihan would be announcing the government's new "plan of action" after next week's cabinet meeting.
Meanwhile Fine Gael has proposed a range of measures, including scrapping pay hikes for ministers and senior civil servants, to deal with the downturn in the economy.
FG Finance spokesman Richard Bruton (left) said "the main danger facing the country now is posed by a government in denial about the economic realities".
His party contends that the sharp downturn in the Irish economy is not due to international factors but to government neglect and mismanagement, particularly in its handling of the construction sector.
The number of junior ministers should be cut by at least three, and € 400 million should be released from what Fine Gael calls "Ireland's failed decentralisation programme".
The party also proposes changes in VAT and stamp duty, but the fundamental thrust of its programme is towards public sector and budgetary reform, which it says "is needed now more than ever".