Cash-strapped Greece managed to pay off its creditors last week, using billions of euros from the EU-led rescue package aimed at containing the debt crisis.

The Papandreou Government redeemed 8.5 billion euros to pay expiring 10-year state bonds, funds which it was unable to raise without outside assistance as wary investors have sent Greek borrowing costs sky-high.

Just a day earlier, the country had received 14.5 billion euros from 10 of the other 15 European Union countries that use the euro.

The loans from other countries in the European Union are part of a 110 billion euro joint EU and International Monetary Fund rescue package.

Greece’s debt crisis sent shockwaves through global markets and, combined with fears for Europe’s struggling economy and German warnings that the future of the euro itself was at stake, sent the common currency to a four-year low against the dollar.

Athens received the first 5.5 billion euros tranche from the IMF two weeks ago and the second and final instalment for this year an estimated 18 billion euro is expected in the autumn.

Prime Minister George Papandreou said the bailout had earned the heavily indebted country time to sort itself out financially.

“This… gives us this opportunity to breathe and to take the big initiatives for institutional changes in our economy and in the structure of our state itself,” Papandreou said.

To secure the foreign loans, the Papandreou Government cut pensions and pubic service pays, while pumping up consumer taxes, increasing retirement ages and pledging to fight corruption and tax cheats.

The country’s budget deficit reached 13.6 percent of annual output last year, while the country’s public debt is expected to reach 133.3 percent of gross domestic product in 2010.

“These changes need to be made, but they must be made with the citizen and not against the citizen,” Papandreou said.

“We are going towards a model of sustainable development, using the wealth that our country possesses, investing in new technologies, in new products, in order to ensure that we emerge from the crisis as quickly as possible, in the least painful possible way for our citizens.”