This is how you heal a country...well said Georgios .

VIENNA (MNI) - Greece's fiscal consolidation program is on track and will remain so, Greek Prime Minister Georgios Papandreou said Friday in a draft for a speech to be held at the IIF spring membership meeting.


"We have taken difficult decisions, tough but necessary decisions," the Prime Minister said. "And we are now witnessing the first signs that we are turning the corner."


Papandreou noted that in the first five months of the year, the Greek deficit was down 40% compared to the same period last year. "So we are well within the targets we have set - and this even before many of the new measures we have taken have locked in," he pointed out.


"We are on target, and expect to remain so," he underlined.


The Greek reform program can start the growth cycle again on a more sustainable basis, the Prime Minister asserted. "Greece has tremendous growth potential waiting to be realized," he said.


Theories about default, haircuts and exit from the Eurozone show a remarkable lack of historical perspective and understanding of the basic rules of European economics and politics, Papandreou argued.


Persistent rumours about returning to the drachma in Greece or being expelled from the European Union are "nonsense," he stressed.


Papandreou welcomed this week's final agreement on the technical details for the EU stabilisation fund for the euro and called for the mechanism to be permanent.


"We should now work for a permanent stabilisation fund, a new European Monetary Fund financed by contributions of Eurozone members proportionate to the size of their wealth," he said.


--Vienna desk: +49-177-724-77-39; email: twidder@marketnews.com