Dec. 19 (Bloomberg) -- Latvia will announce details of a financial bailout package from the International Monetary Fund and European Union at a press conference in Riga today.

Christoph Rosenberg, the IMF mission chief for Latvia, Prime Minister Ivars Godmanis and Finance Minister Atis Slakteris will hold a press conference at 3:00 p.m. local time, according to a statement on the Cabinet’s Web site.

Latvia, which joins Hungary, Ukraine, Serbia and Belarus among eastern European states asking for IMF financial help, may need as much as 5 billion euros ($7.2 billion), Fitch Ratings predicts. The government turned to the IMF after its economy shrank 4.6 percent in the third quarter and it took over its second biggest bank.

The Baltic country faces a “very painful adjustment” after “unusual boom years,” Christoph Rosenberg, the IMF mission chief for Latvia, said at a news conference in Riga on Dec. 16. There is a consensus on keeping the Latvian currency peg to euro, he said.

The country’s parliament has adopted budget measures that will cut state wages by 15 percent and raise the value-added tax to 21 percent from 18 percent.

The Latvian economy is expected to contract 5 percent next year, according to government estimates.

To contact the reporters on this story: Aaron Eglitis in Riga, Lia, at aeglitis@bloomberg.net;

Last Updated: December 19, 2008 03:13 EST