(Adds comment from IMF and World Bank officials)
PARIS -(Dow Jones)- The French Finance Ministry on Friday unveiled a package of financial aid from the European Union and other sources totaling EUR7.5 billion to help struggling member state Latvia.
The aid, which will take the form of loans, will be accompanied by a series of economic measures aimed at stabilizing Latvia's ailing economy, the ministry said in a statement late Friday.
France currently holds the rotating presidency of the European Union.
Of the EUR7.5 billion, EUR3.1 billion will come from the European Union, EUR1.7 billion from the International Monetary Fund, EUR1.8 billion from Sweden, Denmark, Finland and Norway, EUR400 million from the World Bank, and EUR500 million from, the Czech Republic, Poland, Estonia, and the European Bank for Reconstruction and Development.
Together, the loans and the measures tied to them, will help Latvia's economy to "resist the short term pressures on liquidity while improving competitiveness and contributing to an orderly correction of imbalances in the medium term," the statement said.
The package will also help Lativa to fulfill the conditions necessary to adopt the euro and is aimed at maintaining the current Latvian exchange rate, according to the statement.The main points of the program include the cleaning up of Latvia's public finances with the aim of reducing the budget deficit to 5% of gross domestic product in 2009 and then to 3% in 2011.
Structural reforms and salary cuts, notably in the public sector, will help to improve Latvia's position, the statement said.
A restructuring of Latvia's domestic and external debt is also envisaged.
The European Commission will supervise Latvia's implementation of the measures and may demand further actions if necessary.
The loans will be spread over the period to the first quarter of 2011.
In a statement, IMF Managing Director Dominique Strauss-Kahn said Friday, "the IMF-supported program aims to alleviate immediate liquidity pressures, restore long-term stability, and enhance competitiveness."
"This is a fragile period," said Shigeo Katsu, the World Bank's vice president for Europe and Central Asia, in a statement, "so we must do everything we can to prevent the financial crisis from becoming a human crisis."
-By Jethro Mullen, Dow Jones Newswires; 33 1 4017 1738; jethro.mullen@dowjones.com
(Brian Blackstone in Washington contributed to this article)
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=7%2FK5XsmKTKlbfkvDKSg7eA%3D%3D. You can use this link on the day this article is published and the following day.

Publié le 19 Décembre 2008 Copyright © 2008 Dowjones