Deputy Prime Minister Nick Clegg believes the coalition needs to deliver a "difficult" budget today to ensure the UK can avoid the scenarios seen in Greece and Spain.
The Liberal Democrat leader says Labour has left the UK with a mountain of debt, with interest equating to over £800m a week.
Clegg says if the coalition does not take action now, the markets will force the Government into even more drastic measures.
"The Labour party will say that these decisions are not justified. They will say the budget creates risks for our economy and that Liberal Democrats have sold out to go along with Conservative cuts. They are wrong," Clegg says.
"Every time you hear Labour say that, ask them why they covered up the details of the £44bn of cuts they themselves had planned.
"Ask them why they racked up so much debt that we could end up spending £70bn a year just on debt interest."
Clegg says while the Lib Dems always understood cuts would be necessary, it argued the timing should be based on economic circumstances, not political dogma.
"The economic situation today means that time has come," Clegg says.
"A lot has changed even in the last few months. The crisis in the eurozone and the problems in Greece and Spain have put huge pressure on us.
"The new Office of Budget Responsibility has shown that the structural deficit is bigger than we thought.
"So cuts must come. This is one of the hardest things we will ever have to do, but I assure you, the alternative is worse: rising debts, higher interest rates, less growth and fewer opportunities."
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