Lorenzo Bini Smaghi said any relaxing of reform would "ultimately lead to the emergence of bottlenecks in various markets". This would also prevent a strengthening of the 13-country eurozone's "potential" growth rate - the pace at which it can expand without creating excessive inflationary pressures. Speed limits on growth would be hit sooner, "unleashing inflationary pressures".
His comments appeared to be a veiled warning to political leaders not to use current strong economic growth as a reason to slow reform efforts, such as overhauling rigid labour markets or liberalising services.
"If the reform process stops, monetary policy might need to act more decisively to safeguard price stability over the medium term," Mr Bini Smaghi said at an FT-Deutschland and German Institute for International and Security Affairs conference in Berlin.Since December 2005 the ECB has lifted its main interest rate eight times, on each occasion by a quarter percentage point, and markets expect at least one more rise this year.
Economic growth in the eurozone has recovered strongly in the past year, easing worries about the differing performances of its members. But Mr Bini Smaghi, who appears to have been given licence on the six-strong ECB executive board to speak more provocatively, said some countries still faced difficulties ahead.
Wage trends in Italy, Spain, Greece and to a lesser extent in France meant competitiveness had deteriorated, he said. "To regain the lost competitiveness, these countries will have to undertake a similarly painful adjustment to the one conducted in Germany."Mr Bini Smaghi's comments also highlighted the scrutiny that the ECB is giving to potential growth estimates and the degree of slack in the economy.
The Frankfurt-based institution claims it is not guided by concepts such as that of an "output gap" - the difference between actual and "potential" output. But in a study released on Tuesday, the Royal Bank of Scotland pointed to the high correlation between such measures and ECB interest rates.
In contrast, trends in M3, the broad money supply measure to which the ECB attaches importance, was a poor predictor of likely changes in borrowing costs.
*German growth showed further signs of peaking yesterday with the Mannheim-based ZEW institute's economic sentiment indicator falling this month for the first time since November.