ATHENS?Greece is enacting tough reforms after coming "one step from being unable to borrow", Prime Minister George Papandreou said Friday as his debt-hit government pressed for EU political support.

"We have been forced into the toughest decisions ever taken by a government in this country," Papandreou told a union congress in the northern city of Thessaloniki.

"We did it because things had reached a critical state... we found ourselves one step from being unable to borrow," he said, hours after his government unveiled a new bill designed to combat deep-rooted tax evasion.

"We want to prevent this very possibility," Papandreou said.

"We are in a state of war, fighting against interests both within and outside our borders who want to take advantage of the difficult situation and the weakness in which Greece finds itself today."

The Socialist government is trying to plug leaks in its budget -- which last year ended up short of over 30 billion euros -- and bring an end to decades of fiscal waste that accumulated nearly 300 billion euros in state debt.

Papandreou has repeatedly called on the European Union to help Athens bring down its borrowing costs which soared after his Socialists doubled the country's budget deficit estimate after coming to power in October.

"We want to prevent having to pay usurious interest rates for many decades, condemning the country to a deep and protracted recession," he said on Friday.

Papandreou blamed the previous Conservative government of draining public coffers but also admitted that the Greek political system had harboured corruption for decades.

The prime minister has warned that Greece could appeal to the International Monetary Fund "as a last resort" if Brussels fails to provide the necessary backing.

The interest rates demanded by investors to hold Greek bonds have failed to recede despite a spate of austerity cuts announced by the Greek government, worth around 16 billion euros this year.

The European Central Bank has already said that an approach by Greece to the IMF would be inappropriate.

But days from a European Union summit on March 25, Germany officially declared its openness to an IMF appeal, an unprecedented move by a eurozone country.

The Greek government's austerity cuts have already sparked two general strikes and the tax hikes announced Friday are expected to raise fresh objection from work groups affected by the measures.

A wide range of professionals including taxi drivers, gas station owners, doctors and teachers have been holding separate strikes of their own in recent days.

But polls show most Greeks concede the cuts are necessary.