BRUSSELS (MNI) - There are more reasons to be optimistic about the eurozone economy than to be negative, with the region set for a gradual recovery in 2010, European Central Bank Governing Council member Guy Quaden said on Tuesday.

"There are more reasons to be optimistic than to be pessimistic," Quaden told a conference in Brussels, adding that he expects "a gradual recovery in 2010 on both sides of the Atlantic Ocean -- in the US and in the eurozone."

But he cautioned that won't be the "end of our problems because afterwards we will have to discuss and address" exit strategies.

What governments do in the short term such as accepting an increase in public debt is not desirable in the long term," Quaden said.

He said the task of the next few years would be to exit these strategies at a good pace. "For monetary policy it will be quite easy, for fiscal policy it will be more difficult."

He said that the "effect of very accommodative monetary policies and stimulating fiscal policies" were one of the reasons to be positive about the outlook.

"My hope, my conviction," Quaden said, is that "it is a recession, a great recession, but not a depression."

He added that the latest news seem to "confirm that assessment."

Quaden said that as a consequence of weakness in economic growth and in inflation, there is "good news for the purchasing power of our people."

He also said the "rapid decline in inflation made it possible for the central bankers to cut interest rates."

And he stressed that there is "good news coming from emerging markets, more in particular in Asia and in China."

"In Belgium, in Germany we can see in the latest months...a stabilisation of the business confidence and of consumer confidence," he said.

But he said there are "some reasons to hesitate, to remain cautious."

"The financial sector is no longer in the department of intensive care," Quaden said, "but it has not yet fully recovered."

He said two of the reasons for caution are that toxic assets remain in the banking sector, and "with the fall in the economic activity there was also a big decrease in the capacity utilisation of firms."

But "the most important reason to remain cautious is the evolution of the labour market," Quaden said, because "it is not only a temporary problem but a structural problem."