Estonia, EU – Baltic States, Financial Services, Latvia

"At the moment, it is pretty likely that we will participate in this package, but it is too early to talk about size, share and timing," Jarvan told Reuters.

Weekly newspaper Eesti Ekspress informs that Estonia could offer about LVL 45 million from its state reserves, informs LETA.

On Thursday, the EU Economic and Monetary Affairs Commissioner Joaquin Almunia announced that an agreement between the IMF, European Commission and some of the European Union countries stipulates that it will be the European Union that will provide the largest financial support Latvia.

He also said that the issuing the loan to Latvia depends directly on the implementation of the decisions that the government and the parliament of Latvia made last week.

"We are in the last steps of negotiations but we are not yet there. I hope it will finish as soon as possible," said Almunia.

As reported, a press conference will be called at 3 p.m. at the Cabinet of Ministers building today, to inform about the reached agreement on financial aid for Latvia that will be allotted by the IMF, the European Commission and several European Union member states.

Speakers at the press conference will be the Prime Minister Ivars Godmanis (Latvia's First Party/Latvia's Way), the International Monetary Fund's head of the Baltic States and Poland Department Christoph Rosenberg, Finance Minister Atis Slakteris (People's Party) and the Vice-President of the Bank of Latvia Andris Ruselis.

Up until now the precise sum and conditions of the loan have not been publicly revealed.

Sweden and Denmark have agreed to enter a currency swap agreement with Latvia allowing it to borrow up to EUR 500 million.

Before that, December 12, Saeima endorsed an economic stabilization and growth program for Latvia, which envisages stringent restrictions on spending and raising several taxes.

The main measures for optimizing and limiting expenditures in the 2009 national budget include reducing the workforce in the government sector and the budget spending on salaries by 15%.

Government procurement programs will be cut 25%, and subsidies will be reduced as much, except subsidies for health care.

The Bank of Latvia will ensure stability of the lat/euro exchange rate, LVL 0.702804 per 1 EUR with permissible fluctuations of not more than 1%.

Also was approved an increase in the value-added tax rate from 18% to 21%, and the reduced VAT rate from 5% to 10%.