In an interview with The Daily Telegraph on the last day before Parliament's summer break, Cameron said the crisis has proved far deeper than he believed when he took office in 2010. He said the difficulties in the eurozone are a drag on Britain and are likely to continue for years.
When the Conservative-Liberal Democratic coalition took over the government, leaders predicted austerity measures would be needed for five years.
"I think the impairment to our economy in the bad years, the damage done to the banks, the indebtedness of our households, the extent of government debt, the extent of the whole growth model was unbalanced," he said. "You know, that impairment has been greater, it's been tougher to recover."
Cameron's government has to make difficult choices, he said. For example, any tax cuts would mean even deeper spending cuts.
"You can do exciting and radical and Conservative things at the same time as having difficult overall spending choices," he said.
Cameron faces a general election in 2015.