Pavel,
I wouldn't put in the DROP option.
Or at least not in that form of syntax.
By convention CREATE persists DDL and makes object definitions visible
across sessions.
DECLARE defines session private objects which cannot collide with other
sessions.
If you want variables with a short lifetime that get dropped at the end of
the transaction that by definition would imply a session private object. So
it ought to be DECLARE'd.
As far as I can see PG has been following this practice so far.
Cheers
Serge Rielau
Salesforce.com
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