Greece will freeze pensions, cut holiday allowances, and raise sales and luxury tax, the government announced on Wednesday 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 Socialist administration hopes to muster an additional 4.8 billion euros (6.5 billion dollars) 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 on Wednesday the possibility of Athens seeking IMF assistance if the EU now fails to help its debt efforts, the semi-state Athens News Agency said.
Papandreou made the statements while addressing a special cabinet meeting, ANA said, after which he told Greek President Carolos Papoulias: "We are justly awaiting European solidarity, the other side of this agreement."
The Greek PM 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."
Before the government announced the exact size of its latest corrective measures, analysts at UniCredit in Milan said: "We expect that new fiscal measures will be worth at least 5.0 billion euros, or 2.1 percent of gross domestic product, mostly on the expenditure side."
They said: "The phase-in of a major pension reform should also be part of the announced fiscal package.
They 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 percent last year.
At Capital Economics, Bey May said: "The fiscal measures announced by Greece today should allow the government to ease the short-term pressure on its finances with a bond issue and may lead to firmer support from other countries."