Brussels, 25/02/2009 (Agence Europe) - On Wednesday 25 February, the European Commission proceeded to a transfer of the first instalment in the medium-term financial assistance towards helping Latvia's balance of payments. This first tranche is part of the €3.1 billion of EU financial aid. With aid from the International Monetary Fund (€1.7 billion), the Nordic countries (Sweden, Denmark, Finland, Estonia and Norway) (€1.9 billion together) and the World Bank (€0.4 billion), total aid to Latvia is expected to rise to €7.5 billion over the period to the first quarter of 2011. The financial assistance is conditional on the implementation of a comprehensive economic policy programme (adopted in December), which stipulates: 1) the maintaining of Latvia's existing exchange rate peg; 2) an immediate and lasting rationalisation of public finance in an attempt to limit the public deficit to 5% of GDP this year, before bringing it down to 3% of GDP by 2011; 3) implementation of far-reaching structural reforms and wage cuts, particularly in the public sector. In a press release, the commissioner for economic and monetary affairs, Joaquin Almunia declared: “We expect the new government to fully commit to the programme”. Hungary is the only other beneficiary of the balance of payments support mechanism at this stage and expects payment of the second tranche of aid of €6.5bn in total by the end of March (EUROPE 9847). (A.B./transl.rh)