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“It’s important that we are clear about the facts,” Cameron told MPs and senators packed into the House of Commons.

“We’re not quite staring down the barrel. But the pattern is clear. The recovery out of the recession for the advanced economies will be difficult. Growth in Europe has stalled. Growth in America has stalled.

“The effects of the Japanese earthquake, high oil and food prices have created a drag on growth, but fundamentally, we are still suffering from the aftershocks of the world financial bust and economic collapse in 2008.

“That means families in Britain and Canada are facing a tough time.”

Cameron said that he and Harper share the same analysis about the root cause of the current economic problems and the best way to fix them.

“The world is recovering from a once-in-70-years financial crisis and is suffering from debts not seen in decades. This is not a traditional, cyclical recession. It’s a debt crisis.”

Cameron said using the “usual economic prescriptions — fiscal and monetary levels to stimulate the economy — won’t necessarily work now.

“The economic situation is much more dangerous and the solution for most countries cannot be simply to borrow more.

“A long-term solution must tackle the fundamental problem. We must address the problem of excessive debt. Let me say again, it’s a debt crisis.”

Cameron said countries in the Eurozone — of which Britain is not a member — must move swiftly to show they have the political will to get their debt under control.