Eurozone growth is close to stagnation but should recover next year, European Central Bank council member Guy Quaden said on Monday.
"Growth in the euro area seems at present close to stagnation. However, it should return to a more satisfactory path in the course of next year," Quaden, who is also governor of Belgium's central bank, said in a speech to a financial conference in Brussels.
"Inflation is low and declining," Quaden said.
Inflation expectations appeared to have remained very moderate, showing that the euro system of central banks benefitted from a high degree of credibility, he added.
"Could the transition to prices in euro cause a resurgence of inflation? We do not think so," he said.
Referring to asset price moves, he said: "I'm inclined to say that central banks have not to put on these variables more emphasis than warranted by their effects on demand and should avoid asymmetric reactions -- benign neglect in the case of irrational exuberance, intervention in the case of a sharp downward correction -- which could pose a moral hazard problem."
Quaden said that the recent rise in M3 money supply growth had until now been interpreted as a short-term fluctuation.
However, he added: "I would say that while it must be clear the ECB is not planning to abandon M3, I personally cannot rule out that some day M3 could abandon us."
Financial market indicators could gain increased weight in monetary policy formulation as euro zone capital markets became more developed, he said.
"The development of euro area capital markets could ... increase the weight of financial market indicators in the second pillar (of ECB monetary policy strategy)," he said.