The Bishop Auckland MP Helen Goodman has claimed that the scale of cuts being imposed in the region are even worse than those faced by the Spanish people.
Ms Goodman, who worked at the Treasury before becoming a MP, said the initial wave of cuts in 2010 took more than 7% out of the region's economy.
She also said the local councils here were facing cuts 3 times deeper than some councils in the South East.
Her remarks were challenged by the Conservative MP for Guy Opperman.
He accepted that there were difficulties ahead but pointed to recent falls in unemployment in the region.