Markets cheer $6.5b Greek austerity plan

Such a move would be unpalatable for the European Union, highlighting the bloc’s inability to manage the crisis on its own.

“From today the problem can’t be considered ‘Greek’. We are doing what we must and more,’’ Papandreou said. “So now, it is the time of Europe.’’

Greece is already receiving technical help from the IMF, but has not yet appealed for a bailout.

Finance Minister George Papaconstantinou said the IMF would not have imposed any harsher measures had Athens already appealed to it, and would have provided financial aid in return.

What Greece wants is a clear indication from Europe that it would receive help if that became necessary, he said.

The IMF in Washington said it approved of the new plan, which is to be voted on in Parliament tomorrow.

Savings will be split evenly between increasing revenue and slashing spending. Tax increases include a 20 percent hike for alcohol, a 65 percent increase on cigarettes, and raising sales tax, or VAT, from 19 percent to 21 percent. Cuts include curbing civil servants’ pay, cutting bonuses and stipends, and freezing pensions.

Papandreou heads to Berlin tomorrow to meet with German Chancellor Angela Merkel - whose country is highly reluctant to indicate concrete assistance - and then to Paris for talks with French President Nicolas Sarkozy before flying to Washington to meet President Obama.

While markets approved, Greece’s labor unions did not.

“These measures are terrible. I think the government does not realize how little people in this country are being paid,’’ said Despina Spanou of the civil servants union ADEDY.

The union has called its third 24-hour strike for March 16.