Greece will freeze pensions, cut holiday allowances, and raise sales and luxury tax, the government said today to convince the EU and financial markets it can avert bankruptcy.
'We are in a battle against time to satisfy the country's loan requirements - a battle against time to show that we can pull this through,' government spokesman George Petalotis said in a televised address.
He added that the debt-hit administration hopes to muster an additional €4.8 billion from the new measures, which came after the European Union's top economic official exerted pressure on Monday.
Greek Prime Minister George Papandreou left open the possibility of Athens seeking IMF assistance if the EU now fails to help its debt efforts, the semi-state Athens News Agency said.
The Greek prime minister is scheduled to travel to Berlin on Friday and Paris on Sunday for meetings with German Chancellor Angela Merkel and French President Nicolas Sarkozy, and there is talk of a Franco-German aid plan in the works.
Papandreou's spokesman acknowledged that the country faced a 'huge undertaking' at a time when there is 'lack of liquidity caused on international markets by mass recourse to loans by all EU states, which are considered more reliable.'
Analysts said it appeared that European Union auditors had concluded that measures announced previously would have produced only half of the correction which Greece had undertaken to make.
Greece has responded to EU pressure by saying that it will reduce its public deficit this year by four percentage points from 12.7% last year.
