German chancellor Angela Merkel said Greece has covered "much of the ground" required for recovery, during her landmark visit to the financially stricken country.
Merkel, who stopped in Athens today for five hours, said she hoped Greece would remain in the euro zone.
She stressed that the government in Athens still had to push through more key cost-cutting reforms.
"Much of the ground has been covered. There is daily progress," Merkel said after talks with Greek Prime Minister Antonis Samaras.
"This is an effort that should be seen through because otherwise it would make the circumstances even more dramatic later on," she added.
Paying her first visit to Greece in five years, Merkel's arrival triggered protests attended by some 50,000 demonstrators in Athens. The rallies were mostly peaceful, but police briefly clashed with several dozen demonstrators and detained more than 50 people throughout the day.
Although Merkel damped expectations in Athens of a strong public pledge to keep Greece in the euro zone, Samaras said Merkel's visit had ended "the country's international isolation".
More than 7,000 police were on duty for the visit and cordoned off parks and other sections of central Athens, to keep demonstrators away from the German leader.
Many of Europe's leading politicians have avoided official travel to Greece and the risk of a hostile reception, as the debt-saddled country struggled to keep up with commitments needed to guarantee rescue loan payments and long-term euro membership.
But Merkel, heading Europe's largest bailout contributor, accepted Samaras' invitation to Athens despite failure by his government so far to conclude a massive new austerity package. The cuts will save €13.5 billion but will result in a sixth year of recession in 2013 for Greece.
Greece's debt crisis started in late 2009 after it misreported deficit figures, triggering fears that debts in other eurozone countries may also be at risk. Since May 2010, the country has depended on bailouts from the euro zone and the International Monetary Fund.
But to get the loans, it implemented successive pay cuts and tax hikes, while increasing retirement ages and facilitating private sector layoffs that are expected to push the rate of unemployment up next year to nearly one in every four workers.
