Next year poses "many great challenges" for everyone in Britain, Nick Clegg has warned in a gloomy new year message.
The Deputy Prime Minister said the UK had been "pulled back from the brink" but the "economic rescue mission" remained the coalition's number one priority.
In a video message to Liberal Democrat activists, he insisted the actions being taken as part of a power-sharing Government were "not easy" but were right.
And, in an attempt to rally the grassroots, he claimed it was the Lib Dems who had ensured the Government was helping people get through the tough times.
"We have had to make some very difficult decisions, but they've been the right ones for the long-term good of our country. A country that was at risk of falling prey to the international markets has been pulled back from the brink. We only need to look at what is happening in countries on our European doorstep to see what we could have ended up dealing with in 2011.
"But that economic rescue mission is not over yet and there is much more we must do. That's why, thanks to the Liberal Democrats, the Government has been helping people get through these difficult times with measures to make life fairer and easier."
Deputy leader of the Liberal Democrats Simon Hughes told BBC Radio 4 that the party had to "hold its nerve".
He said: "I take the message (from the party's electoral results) as I predicted a year ago we would have a very difficult year. Government is always more difficult than opposition.
"Everyone knows that in the coalition you can't get everything in your manifesto and you have to let go of some of those things and you get punished for that. But we have achieved about two thirds of the things we went into the last election saying we wanted to do."
Mr Hughes said his party was signed up for the full five years of government and had "stepped up to the plate" to ensure the country recovered from the economic crisis fairly.