VILNIUS, March 5 (Reuters) - Lithuania's exporters are being hit by the litas' overvaluation, a lawmaker said on Thursday, one of the first senior politicians to bring up problems related to keeping the currency's fixed peg.
At the same time, Kestutis Glaveckas, the head of parliament's finance and budget committee, said he remained against a devaluation of the litas, which is pegged to the euro.
Lithuania has faced problems as its economy has gone into recession just as the currencies of trade partners have fallen.
"Indeed, the litas has become very overvalued against surrounding currencies, it has become very expensive, hurting our exporters," Glaveckas told a news conference.
Glaveckas, who is in the Liberal Union, a junior member of the four-party ruling centre-right coalition, said the litas exchange rate could be changed by the European Central Bank (ECB) when the country eventually enters the euro zone.
But speaking later to Reuters, he said a devaluation now was still not a good idea. "A litas devaluation is not an option, it would be a catastrophe ... It would suck us under the ice."
At the news conference, he said revenues from value added tax (VAT) were 16 percent lower than planned in the first two months of the year and that the state and social budgets were 500 million litas below plan.
"We will have to slash the spending by another 2.5 billion litas," Glaveckas said. "It's a huge cut... It will mean spending getting to the 2007 level."
The current level sets state budget spending at 26.9 billion litas ($9.81 billion), with a deficit of 1.5 billion litas. (Reporting by Nerijus Adomaitis; Editing by Ron Askew)