"We are in a state of war, in a battle against special interests, both at home and abroad - this is a battle against speculators and for transparency so that markets are at the service of the people, and not the other way around," Papandreou said, addressing an annual congress of country's private union, GSEE.

"I am speaking with all honesty before the Greek people that we are one step from being unable to borrow."

The prime minister warned that "we must avoid paying enormous interest for decades which will condemn the country to a deeper recession."

Greece has warned that it will be forced to turn to the International Monetary Fund (IMF) if the European Union cannot agree to a bailout plan next week that will help reduce its market borrowing rates.

Greece has found itself paying a high price to sell bonds because investors fear that it massive budget gap this year could cause it to default on debt payments.

Athens needs to borrow some 54 billion euros this year, of which 20 billion must be borrowed in April and May.

Papandreou said he wants Greece to borrow at similar rates to other members of the eurozone.

Athens is raising the stakes by calling a firm commitment of financial support at an EU summit in Brussels on March 25-26.

The ruling Socialist government rattled markets and EU fellow members when he revealed shortly after coming to power in October that the budget deficit was higher than what the outgoing conservatives had reported.

Under pressure from the EU to do more to stem the crisis that has shaken the euro, Athens recently announced an additional 4.8 billion euros in savings through public sector salary cuts, hiring and pension freezes and consumer tax hikes to deal with the deficit.

The cutbacks, added to a previous 11.2-billion-euro austerity plan, seek to reduce Greece's budget deficit from 12.7 percent of gross domestic product (GDP) to 8.7 percent this year.

"We were forced to take the most difficlut decisions ever taken by any government that this country has ever had...because if we do not make sacrifices today then the problem will spiral out of control.

"I want social partners and the workers on my side and not against me...I promise that our efforts will pay off," Papandreou said.

Germany, the eurozone's richest nation, has opposed bailing Greece out and German Chancellor Angela Merkel warned earlier this week that countries that consistently fail to meet EU fiscal rules to be punished and eventually thrown out.

Greeks predict their financial crisis will get even worse next year and believe the government's package of austerity measures to be unfair, an opinion poll showed Friday.

A survey, conducted by polling agency Metron Analysis for the Greek newspaper Eleftherotypia, found 56 percent of Greeks to believe the country's fiscal crisis will be in worst shape next year.

Based on the poll, 66 percent of respondents believe the country's crisis will last more than two years, while 67 percent feel the Socialist government's package of austerity measures to be unfair.

The survey showed 71 percent of Greeks to believe that the government was taking the wrong course of action and 64 percent said they were not willing to make the necessary sacrifices to bring the country's economy back on track.

On Thursday, Athens introduced a new tax law on Thursday as part of a drive to tame a budget crisis that has shaken global markets.

The new law, which foresees increased taxes for citizens that send their children to private schools and owners of luxury cars, yachts and homes owners equipped with swimming pools, will be presented to parliament March 23 and enter force as soon as it is adopted.

Under the new law the government will also ask the powerful and wealthy Greek Orthodox church, whose bishops sit on a board of the country's largest bank, to do its part given the sacrifices the average worker is making.

The Church of Greece, one of the country's biggest owners of prime real estate, has until now been largely exempt from paying taxes even though the state pays priests' salaries.

The draft law foresees church income from real estate holdings to be taxes at 20 percent.