Greece's finance minister outlined deep spending cuts and tax increases Sunday to free up a multi-billion-euro rescue by the International Monetary Fund and European Union, the first bailout for one of the 16 countries using the euro.

The measures, which include tax increases and salary and pension cuts for civil servants, aim to reduce the budget deficit to below 3 percent of gross domestic product by 2014, from the current 13.6 percent of GDP, George Papaconstantinou said.

"We are called on today to make a basic choice. The choice is between collapse or salvation," he said.

The full amount of the three-year IMF/eurozone package will be announced in Brussels after an emergency eurozone finance ministers' meeting, where Papaconstantinou was heading after his Athens news conference. He said the amount would be "close to" widely reported figures. French and other officials have said it would be euro120 billion.

Papaconstantinou said savings worth euro30 billion through 2012 would be achieved through public service and pension pay cuts, higher taxes and streamlining government.

Papaconstantinou said that annual holiday bonuses will be capped at euro1,000 ($1,330) per year for civil servants and scrapped for those with gross monthly salaries over euro3,000 ($3,995). Pensioners' bonuses will also be capped at euro800 ($1,065) and canceled for those paid more than euro2,500 ($3,330). The cuts will not extend to the private sector, as had been widely feared.

Greeks receive their annual pay in 14 salaries, receiving extra at Christmas, Easter and for their summer vacations.

Taxes would also be increased, including further hikes on alcohol and tobacco. The top bracket of sales tax rising from 21 percent to 23 percent.

Papaconstantinou said his country's debt would reach 140 percent of GDP in 2013 and start falling from 2014, while economic output is set to contract by 4 percent in 2010.

The new austerity measures were seen as essential for the EU and IMF to unblock the rescue package, which Athens asked for last week and which will see other eurozone countries and the IMF extend loans to Greece. Germany, which has the eurozone's largest economy and so would be the largest single contributor, had been highly reluctant to release any funds without Athens implementing more harsh spending cuts.

After Papaconstantinou's announcements, EU Commission President Jose Manuel Barroso said the new measures were "solid and credible" and that he was recommending the EU activate the rescue package.

"The Commission considers that the conditions for responding positively to the request by the Greek government are met and recommends that the coordinated European mechanism for assistance to Greece be activated," he said in a statement in Brussels.

Barroso said the aid will be "decisive" in getting Greece back on track and protect the financial stability of the 16 nations using the euro currency.

Papaconstantinou said the government hoped to be able to return to borrowing on the market soon, but that the plan would allow the government breathing space to implement its austerity program and put its finances in order.

"We are confronted with international markets that do not give us the time to make the necessary adjustments," he said. Greece has seen its borrowing costs skyrocket to more than four times those of Germany on the international market in recent weeks.

Earlier, Prime Minister George Papandreou announced his government had reached an agreement in tough negotiations with the IMF and EU on the measures.

"The avoidance of bankruptcy is the national red line," he told the Cabinet in a televised speech to his Cabinet. "I want to be clear to all. I have done and will do everything so the country does not go bankrupt."

Papandreou called on Greeks to make "great sacrifices" to avoid a catastrophe, and said the country's problematic civil service would bear the brunt.

There will also be further hikes in consumer taxes, and deep cuts in defense spending and hospital procurement, the prime minister said.

"The alternative course would be a catastrophe and greater pain for all," he said.

Greek unions planning a general strike Wednesday against the new cuts. Violent clashes broke out Saturday during anti-government protests at May 1 Labor Day rallies.

The government will submit special emergency legislation to Parliament that was agreed upon with the EU and the IMF at a negotiating session Saturday. Parliament is expected to approve the measures by Friday.

"Economic reality has forced us to take very harsh decisions," Papandreou said, adding that "This is the only way we will finance our euro300 billion debt."

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Associated Press writers Demetris Nellas in Athens and Raf Casert and Elena Becatoros in Brussels contributed to this report.