Lithuania's first female leader to cut spending

The first woman to be elected President of Lithuania said that the government must slash spending and questioned whether the country can afford its generous parental leave benefits.

Dalia Grybauskaite, who has a karate black belt, confirmed her reputation as a tough negotiator with a stern message to the centre-right government: the budget must be cut and some ministers may lose their jobs when she takes office on 12 July.

"They have underestimated the real scale of recession," she said. "The budget was far too optimistic and needs to be revised soon. We must save money."

Ms Grybauskaite highlighted Lithuania's parental leave program as a possible area for budget cuts. It allows parents to to stay at home with a child for one year, on full pay, and on 85 percent of their salary for a second year. Both mothers and fathers are eligible, although only one of them can receive the benefits. The parental leave program was introduced last year as a way to reverse the country's declining birth rate.

"Raising babies for two years is a very good idea, but does Lithuania now have enough resources for this program? I am not sure," Ms Grybauskaite said.

To lead by example, she said she would only take half of her yearly presidential salary of 312,000 litas (£80,000).

Ms Grybauskaite, 53, decided to run for President after a stone-throwing mob attacked Parliament in January amid public outrage over the government's handling of the recession.

It was the worst street violence Lithuania had seen since it regained independence from the Soviet Union in 1991. Running as an independent, she won nearly 70 per cent of the vote.

Ms Grybauskaite said she would not seek to replace the Prime Minister but indicated that she was not impressed by the ministers of Finance, Social Welfare, Health, Economy and Energy: "Those five ministers are the first I'd like to meet and hear their ideas on this situation."