(Removes incorrect reference in second paragraph to Mersch speaking on Friday. Interview was published on Thursday)
(adds Trichet, Gonzalez-Paramo comments)
* ECB's Mersch says large rate cut could backfire
* Gonzalez-Paramo says ECB has "different reactions" to other cenbanks
* Trichet says not surprised by fall in PMIs
By Gavin Jones
ROME, Nov 21 (Reuters) - European Central Bank policymakers cemented on Friday expectations that they will cut interest rates once more next month, possibly by half a percentage point again and well short of the action taken by other banks.
Governing Council member Yves Mersch warned against expecting that the bank would lower rates at its Dec. 4 meeting more sharply than the two cuts it has made since October.
"A large rate cut could be counterproductive and signal the opposite (to) what we wish to signal, namely certainty and confidence," Mersch, the governor of Luxembourg's central bank, said in an interview with Dow Jones news agency.
After its second half point cut earlier this month, the ECB was criticised by some analysts who had been hoping for a more decisive move in view of a rapidly deteriorating euro zone economy and falling inflation.
By contrast the Bank of England cut British rates by 1.5 percentage points this month and the Swiss National Bank made a surprise 1.0 point cut on Thursday.
ECB Executive Board Member Jose Manuel Gonzalez-Paramo dismissed on Friday comparisons with other central banks and also appeared to play down the chance of a large December cut.
"We don't have the same mandate and the reactions are different," he said at a conference in Madrid. "The mandates of these central banks don't coincide with that of the ECB, that is very much centred on maintaining price stability."
Since the last ECB cut, data has shown the euro zone fell into recession in the spring, the outlook has worsened even more, deflation has become a more commonly voiced concern than inflation and the ECB has made clear there is room for more monetary easing.
Comments from other policymakers the day after the ECB's mid-month gathering suggested a December cut was all but certain.
ECB President Jean-Claude Trichet told reporters in Frankfurt he had "already said ... we could decrease rates", a message rammed home by fellow Governing Council members Axel Weber and Ewald Nowotny.
"Owing to a remarkable decline in inflationary pressure in the medium term and rapidly deteriorating economic prospects, euro area monetary policy, in my view, has enough leeway for further easing if necessary," Bundesbank President Weber said at at the same banking conference attended by Trichet.
But Weber, who is known as a monetary policy hawk, looked beyond the current weakness and warned that rates may eventually have to rise again almost as fast as they have come down.
"Substantially easing monetary policy in the short term to deal with the effects of a bursting financial bubble on the real economy entails the obligation to normalise monetary policy again more swiftly than in the past in order to prevent new imbalances from emerging," he said.
Trichet said that data on Friday showing manufacturing and services activity in the 15-nation region shrank by a record amount in November was "not a surprise".
Austrian central bank Governor Nowotny said the ECB's December meeting would again focus on how much, rather than if, rates should come down.
"What we see is a substantial decline in inflation expectations and that this substantial decline gives room for further measures on the interest (rate) side," he told reporters. "How big these possibilities are and which form they should take, we will discuss in two weeks."
However, in comments reported by the Market News agency, Nowotny also appeared to suggest a third consecutive half point cut was likely. Asked if the next cut would be of a similar size to the last two, he replied, "Yes, but I cannot give more detailed indications."
Euro zone inflation fell to 3.2 percent in October, the third decline in a row since a 4.0 percent rate in July, but Mersch and Gonzalez-Paramo both played down any prospect of deflation, meaning persistently falling prices.
"I would not rule out that over one or two months we might have a falling price index," Mersch said, but he added that the ECB should look beyond such short-term developments.
Rather than deflation he expected "welcome disinflation", bringing inflation closer to the ECB's target of close to but below 2 percent.
"It's very unlikely that sharp reductions in prices go further than transitory falls," Gonzalez-Paramo said.