The International Monetary Fund has cut its forecast for U.S. economic growth and warned that the federal government should take immediate steps to reduce the budget deficit, Reuters reported.

Debt-ridden European countries were also told that not reducing budget deficits is like “playing with fire.”

“You cannot afford to have a world economy where these important decisions are postponed, because you’re really playing with fire,” said Jose Vinals, director of the International Monetary Fund’s monetary and capital markets department.

Markets have been upset over concerns that the United States could default on its debt, even briefly. Fitch Ratings said even a “technical default” would endanger the nation’s AAA rating.

Greece has edged closer to default as strikes, protests and political unrest stoke the fears of analysts who think the government won’t be able to cut enough spending to reduce debilitating deficits.

“We have now entered very clearly into a new phase of the (global) crisis, which is, I would say, the political phase of the crisis,” Vinals said.