Lithuania does not face the immediate prospect of a Greek debt and deficit crisis, but would do in a couple of years if it does not take fiscal consolidation measures now, Prime Minister Andrius Kubilius said on 1 June to the Reuters TV, the Governments press office reports.

Last week Kubilius told parliament that his country, which has slashed spending and raised taxes amid a deep recession, must steel itself for more austerity if it wants to avoid a Greek-style debt crisis.

“That was some kind of a metaphor used to convince Lithuanian politicians not to think that all has been done,” Kubilius said an interview with Reuters Insider television. “My metaphor was very simple: if we hope that we can do nothing for the next two years we shall have problems we see now in south Europe,” Kubilius said.

Kubilius said he was optimistic about being able to reduce the budget deficit by another 5 percent of GDP after the country was able to implement austerity measures equal to some 12 percent of GDP in 2009 and 2010. But he wanted parliament to act fast and was concerned that the Greece debt crisis was creating nervousness in international financial markets while his country still needed to borrow.

“That is why we need to have our consolidation package as soon as possible, we cannot wait until the problems become more serious in international markets…That`s why I sent the message to the parliament,” Kubilius said.

The finance minister has said Lithuania still needed to borrow about 2 billion Lithuanian litas after raising a record $2 billion international bond in February. Despite the austerity measures already implemented, Lithuania still faces a deficit of 8 percent of GDP in 2010.

Kubilius said Lithuania was not considering an option to break its peg to euro, despite the fall and that euro adoption in 2014 was the goal. Asked whether he saw Greek problems dealying euro zone enlargement, he said: “No, I don’t think so.”

Lithuania pledged to the European Union to cut its deficit to 3 per cent of GDP by 2012, qualifying it to adopt the euro in 2014. The country targets a deficit of 8.1 percent of GDP in 2010 and 5.8 per cent in 2011.