Brussels  - Talks between the European Union and Latvia on providing financial aid to the Baltic country have reached the final stretch, with a decision expected in the coming hours, EU Monetary Affairs Commissioner Joaquin Almunia said Thursday.

"We are pursuing ways in which we can contribute to financing the (aid) package with the International Monetary Fund and other partners," Almunia said in Brussels.

"We are in the last phase," he said.

Latvia is one of the European countries to have been hardest hit by the global credit crunch, and is reportedly seeking outside help totalling between 3.5 and 6 billion dollars.

Sweden and Denmark have already announced measures to support the Latvian currency, with further help being provided by the IMF and the European Union.

EU finance ministers recently agreed to raise the total amount of money available to member states which run into financial trouble - from 12 billion euros (17 billion dollars) to 25 billion euros.

Hungary was the first EU country to receive loans from Brussels - 6.5 billion euros - and Lithuania could be next in line.

During its talks with the European Commission, the Latvian government agreed to a series of measures designed to contain its budget deficit within the 3-per cent-of-gross domestic product limit prescribed by the EU's Stability and Growth Pact.

"Our strategy is based on planning for a budget deficit not exceeding 3 per cent of GDP by the year 2011," Latvian Finance Minister Atis Slakteris said ahead of an informal meeting of EU finance ministers in Paris.

Slakteris said the government had already moved to "stabilize the banking sector" and that its budget envisaged "cuts in salaries and public administration expenses."

Almunia, who acts as the guardian of the Stability Pact, was also expected to attend the meeting in Paris.

Sources in Riga have said an announcement on Latvia's aid package could be made as soon as Friday. (dpa)