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FRANKFURT, Feb 5 (Reuters) - The Greek government is making progress on its path toward fiscal consolidation, European Central Bank Executive Board member Juergen Stark said in a radio interview on Friday.
"The prerequisite for reforms is that the need for reform steps is acknowledged," Stark told Germany's Deutsche Welle, in a recording posted on its Web site.
"Greece has taken an important step in the right direction."
Stark's comments echo remarks by ECB President Jean-Claude Trichet who said on Thursday that measures taken by Greece such as tax rises, the freezing of wages in the public sector, and the pension reform, were encouraging. [ID:nLDE6122DR]
Stark also said the problems in other euro-zone countries did not equal those of Greece, but were of an individual nature.
Greece has been hit hard on international markets after the new Socialist government revealed in October its budget deficit was twice as big as previously announced and more than four times the euro zone ceiling of 3 percent of GDP.
This has sparked talk about a possible bailout by the European Union and fears about the stability of the euro area.
Asked whether it would make sense to set up a European monetary fund, Stark said: "I do not think that setting up extra measures -- even under strict conditions -- would be necessary. This would also not be compatible with rules of the monetary union."
He added that it was time to withdraw some of the extraordinary measures the ECB has taken to soften the impact from the global financial crisis.
"We have to, now that the situation is stabilising gradually, also withdraw these measures step by step," Stark said. "This applies both to central banks and to governments: They have to start this year to consolidate budgets, and step up their efforts in 2011." (Reporting by Sakari Suoninen and Eva Kuehnen, editing by Krista Hughes and Toby Chopra)