Greek finance minister said on Sunday that Greece's budget cuts could reach 30 billion euros (39.8 billion U.S. dollars) by the end of 2012 as part of the additional austerity measures to secure an aid package of 120 billion euros (160 billion dollars).

"We were called upon to make a basic choice: leave the country to collapse or save it. We chose the second," George Papaconstantinou said.

The country's budget deficit would be reduced to below 3 percent of GDP by 2014 from the current 13.6 percent, he said, adding that by the end of this year the aim is to limit the figure at 8 percent.

The exact amount of loans Athens will receive from the European Union and the International Monetary Fund over three years will be announced on Sunday afternoon after a special eurozone meeting in Brussels.

The minister made the remarks after Prime Minister George Papandreou announced earlier in the day that Greece has reached a rescue package with the EU and IMF to avoid "bankruptcy."

The value added tax (VAT) will be raised to 23 percent from 21 percent,with further hikes on taxes of fuel, tobacco and alcohol, as well as a 10 -percent hike on taxes of luxury products and more taxes on earnings from lotteries, Papaconstantinou said.

The 13th and 14th salaries of civil servants, who earn more than 3,000 euros (3,990 dollars) per month, will be drastically slashed, he said. They will receive a bonus of 1,000 euros (1,330 dollars) per year instead of two whole monthly salaries.

Similar cutbacks will be implemented on pensioners of public sector agencies who earn more than 2,500 euros (3,325 dollars) monthly. In the future they will receive only 800 euros (1,064 dollars) per year instead of the 13th and 14th salaries.

Further cutbacks of up to 8 percent on allowances that all public servants get will be implemented, Papaconstantinou said.

The government aims to protect private sector workers of low incomes, he stressed, adding that there will be created a safety net, with minimum wages and allowances for young employees and unemployed.

Regarding the reform of pension system to be announced next week, Papaconstantinou said from 2011 women who work in the public sector will start getting pensions at the same minimum age limit with their men colleagues.

On the other hand, all Greeks above 65 years old will get a minimum pension.

Papaconstantinou also noted that the government will take measures to support the banking system and growth.

The fiscal adjustment Greece is called upon to make is of unprecedented standards for the Greek economy, as well as the eurozone. Unprecedented is on the other hand the amount of financial aid Greece will receive through the newly created EU-IMF support mechanism.