Berlin - German Chancellor Angela Merkel on Wednesday pledged her country's support for Latvia in its struggle to recover from the economic and financial crisis.

Conditions attached to a rescue package put together by the European Union and International Monetary Fund (IMF) for Latvia needed to be politically viable, she said after talks with Latvian Prime Minister Valdis Dombrovskis in Berlin.

Dombrovskis said the 7.5-billion-euro (9.9 billion dollars) loan package designed to save the Baltic state from bankruptcy was enough for the time being.

"At present we are not looking for further funds," said the prime minister, but he did not call for an easing of the conditions attached to the facility.

As part of the terms for receiving the loan, Latvia announced pay cuts for public servants of 15 per cent and later of a further 20 per cent, triggering widespread protests by doctors, teachers and police officers.

Latvia has been one of the EU countries hardest hit by the global financial meltdown. After posting years of strong growth, its economy was projected to shrink around 17 per cent in the first quarter of 2009.

Last November the government was forced to take a majority share in the Parex Bank in move designed to help the country's second biggest financial institute from going bankrupt.

Dombrovskis said he was looking for a strategic investor to take a stake in the bank and to this end was holding talks with German banking officials.

The European Bank for Reconstruction and Development took a share in the troubled banks earlier this month. (dpa)