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By Boris Groendahl
VIENNA, Nov 21 (Reuters) - European Central Bank (ECB) Governing Council member Ewald Nowotny said on Friday that the next ECB meeting would discuss how much room it has to cut interest rates as inflationary pressures have dropped.
"Because of the significantly lower inflationary pressures there are certainly possibilities for interest rate policy," Nowotny told journalists at a briefing of the Austrian business journalists' club.
"I can only add to what (ECB President Jean-Claude) Trichet has said ... that what we see is a substantial decline in inflation expectations and that this substantial decline gives room for further measures on the interest side," he said.
"How big those possibilities are and which form they should take, we will discuss in two weeks," he said.
Nowotny said he did not see prospects for deflation in the euro zone, which had an advantage compared to the United States in terms of wage growth.
"The advantage of Europe is something that has always been seen as a disadvantage -- it has a more stable wage development. Being somewhat inflexible in terms of wages has been positive during this phase because this gives basic support for demand."
In terms of growth, Nowotny said outlooks for the euro zone next year had been revised downwards significantly by forecasters including the International Monetary Fund (IMF), the OECD and others.
"We see reduced forecasts everywhere, and the expectation that there will be stagnation in the euro zone next year at best, but possibly a fall in GDP," he said. (Reporting by Boris Groendahl; Editing by Ron Askew)