diff --git a/compiler/src/prog8/ast/StmtReorderer.kt b/compiler/src/prog8/ast/StmtReorderer.kt
index c75663bcd..753ddea88 100644
--- a/compiler/src/prog8/ast/StmtReorderer.kt
+++ b/compiler/src/prog8/ast/StmtReorderer.kt
@@ -10,6 +10,9 @@ fun Module.reorderStatements(namespace: INameScope, heap: HeapValues) {
     this.process(checker)
 }
 
+const val initvarsSubName="prog8_init_vars"    // the name of the subroutine that should be called for every block to initialize its variables
+
+
 private class StatementReorderer(private val namespace: INameScope, private val heap: HeapValues): IAstProcessor {
     // Reorders the statements in a way the compiler needs.
     // - 'main' block must be the very first statement UNLESS it has an address set.
@@ -93,6 +96,19 @@ private class StatementReorderer(private val namespace: INameScope, private val
 
         sortConstantAssignments(block.statements)
 
+        val varInits = block.statements.withIndex().filter { it.value is VariableInitializationAssignment }
+        if(varInits.isNotEmpty()) {
+            val statements = varInits.map{it.value}.toMutableList()
+            val varInitSub = Subroutine(initvarsSubName, emptyList(), emptyList(), emptyList(), emptyList(),
+                    emptySet(), null, false, statements, block.position)
+            varInitSub.linkParents(block)
+            block.statements.add(varInitSub)
+
+            // remove the varinits from the block's statements
+            for(index in varInits.map{it.index}.reversed())
+                block.statements.removeAt(index)
+        }
+
         return super.process(block)
     }
 
diff --git a/compiler/src/prog8/compiler/target/c64/AsmGen.kt b/compiler/src/prog8/compiler/target/c64/AsmGen.kt
index a80278da5..e85667af1 100644
--- a/compiler/src/prog8/compiler/target/c64/AsmGen.kt
+++ b/compiler/src/prog8/compiler/target/c64/AsmGen.kt
@@ -173,6 +173,12 @@ class AsmGen(val options: CompilationOptions, val program: IntermediateProgram,
         }
 
         out("  ldx  #\$ff\t; init estack pointer")
+        out("  ; initialize the variables in each block")
+        for(block in program.blocks) {
+            val initVarsLabel = block.instructions.firstOrNull { it is LabelInstr && it.name==initvarsSubName } as? LabelInstr
+            if(initVarsLabel!=null)
+                out("  jsr  ${block.scopedname}.${initVarsLabel.name}")
+        }
         out("  clc")
         out("  jmp  main.start\t; jump to program entrypoint")
         out("")
diff --git a/examples/primes.p8 b/examples/primes.p8
index 443acf5b5..9590140c0 100644
--- a/examples/primes.p8
+++ b/examples/primes.p8
@@ -2,12 +2,11 @@
 
 ~ main {
 
+    ubyte[256] sieve
+    ubyte candidate_prime = 2
 
     sub start() {
-        ; clear the sieve, and mark 0 and 1 as not prime.
-        memset(sieve, 256, false)
-        sieve[0] = true
-        sieve[1] = true
+        memset(sieve, 256, false)   ; clear the sieve
 
         ; calculate primes
         c64scr.print("prime numbers up to 255:\n\n")
@@ -21,21 +20,21 @@
         c64.CHROUT('\n')
     }
 
-    ubyte[256] sieve
 
     sub find_next_prime() -> ubyte {
-        for ubyte prime in 2 to 255 {
-            if not sieve[prime] {
-                ; found one, mark the multiples and return it.
-                sieve[prime] = true
-                uword multiple = prime**2
-                while multiple < len(sieve) {
-                    sieve[lsb(multiple)] = true
-                    multiple += prime
-                }
-                return prime
-            }
+        while sieve[candidate_prime] {
+            candidate_prime++
+            if candidate_prime==0
+                return 0        ; we wrapped; no more primes available in the sieve
         }
-        return 0
+
+        ; found next one, mark the multiples and return it.
+        sieve[candidate_prime] = true
+        uword multiple = candidate_prime**2
+        while multiple < len(sieve) {
+            sieve[lsb(multiple)] = true
+            multiple += candidate_prime
+        }
+        return candidate_prime
     }
 }
diff --git a/examples/test.p8 b/examples/test.p8
index a752922c2..668332c28 100644
--- a/examples/test.p8
+++ b/examples/test.p8
@@ -2,26 +2,17 @@
 
 ~ main {
 
+    ubyte xx=99
+    word yy=12345
+
     sub start() {
-        while true {
-            A=99
-        }
+        c64scr.print_ub(xx)
+        c64.CHROUT('\n')
+        c64scr.print_w(yy)
+        c64.CHROUT('\n')
 
-        while true {
-            A=99
-            if A>100
-                break
-        }
-
-        repeat {
-            A=99
-        } until false
-
-        repeat {
-            A=99
-            if A>100
-              break
-        } until false
+        foo.derp()
+        foo2.derp()
     }
 
 
@@ -33,3 +24,21 @@
     ;        push_byte  ub:01
     ;        jnz  _prog8stmt_7_loop
 }
+
+
+~ foo {
+
+    ubyte woo=2
+
+    sub derp() {
+        A=woo
+    }
+}
+
+~ foo2 {
+
+    sub derp() {
+        ubyte woo=3
+        A=99
+    }
+}