* Gonzalez-Paramo-ECB to lay out extra measures in May
* ECB has small scope to cut rates
* Euro zone March inflation 0.6 percent y/y
* Liikanen sees tentative signs of stabilisation
(Adds comments from ECB's Wellink)
By Andrew Hay
MADRID, April 16 (Reuters) - The European Central Bank will unveil alternative financing measures next month and is ready to trim interest rates again, a policymaker said on Thursday, as new data underlined the scale of the region's recession.
Euro-zone inflation was confirmed at an all-time low of 0.6 percent in March, and the bloc's industrial production plummeted in February underlining the depth of the downturn and adding to pressure for the ECB to ease policy.
Despite the news, ECB policymaker Erkki Liikanen said there were signs of the economy stabilising, although he added it was too early to draw definite conclusions.
ECB Executive Board member Jose Manuel Gonzalez-Paramo also reiterated that the bank would lay out new measures next month.
"At the beginning of May we will announce additional measures, oriented to optimise the effectiveness of our monetary policy, dealing with improving the availability of financing," he said in Web chat. (For story please click)
He did not give details of the measures, but made a point of saying the ECB had so far focused its efforts on banks.
The comments echoed those of ECB Governing Council member Axel Weber who on Wednesday said ECB measures should concentrate on the clogged up banking sector, rather than capital markets.
Following a steady stream of hints over the past weeks analysts expect the Frankfurt-based central bank to extend the length of time it lends banks cash up to 1 year from a current six months.
They are also speculating whether the ECB will follow the U.S. Federal Reserve, the Bank of England and the Bank of Japan down the path of asset purchases.
Asked if the central bank was prepared to buy corporate debt, Gonzalez-Paramo said it would do what was needed.
"It (ECB) has always taken necessary action, including increasing the size of our balance sheet to 6 percent of euro zone GDP," said Gonzalez Paramo. "Up till now, our non-conventional measures have been concentrated on the banking sector, which provides 70 percent of euro zone private sector financing."
WEAK ECONOMY
The ECB has cut its benchmark rate by 300 basis points since October and is widely expected to cut it to 1 percent at its May 7 meeting. (For Reuters analyst poll, double click on)
Gonzalez Paramo further bolstered the view that this would be its final move, saying the ECB had only little room left to cut its main interest rate.
"While 1.25 percent can't be considered the minimum level, the margin for reduction is moderate. I would say very moderate," Gonzalez-Paramo said. "Excessively low rates reduce incentives for everyone, especially the most indebted, to restructure their finances."
Governing Council member and head of Finland's central bank, Liikanen, said there were tentative signs of economic stabilisation, although he added it was too early to draw definite conclusions.
"If you follow all the indicators, you see some stabilisation, albeit at a low level," Liikanen said.
"Perhaps there is stabilisation, but before you get all data (it's) better to be prudent."
Liikanen did not give a clear reference as to whether he was talking about the euro zone or global economy stabilising.
But in the Netherlands, ECB Governing Council member Nout Wellink said that while the euro zone economy performed worse in the first quarter than expected, the negative trend was starting to level off.
"The deterioration in the first quarter was stronger than some had expected, but that is starting to level off," Wellink said.
Wellink, who also heads the Dutch Central Bank (DNB), said he was not worried at the moment about a higher risk of deflation in the euro zone.
"We know that we will have months of negative price developments in Europe. That is not necessarily a reason to worry as this raises available income. It would be a reason to worry if this leads to postponement of spending by investors and consumers," Wellink said.
Outside the 16-country euro zone, Bank of England Monetary Policy Committee member-designate David Miles, said the worst of Britain's recession may be over and that there were signs the Bank of England's quantitative easing programme may be working.
But data pointed in the other direction. Industrial production in the euro zone plummeted more than expected in February, and was down a record 18.4 percent from the same month a year earlier.
Economists warned on the year ahead. "GDP is ... unlikely to shrink by much less than 2 percent quarter on quarter, thus paving the way for a 4.5 percent decline in the full year," Dresdner Kleinwort economist Rainer Guntermann said.
Stocks rallied, however, boosted by a soothing outlook by the world's top cellphone maker Nokia, which said the demand fall was stabilising. The FTSE Eurofirst 300 benchmark index was up 1.63 percent by 1600 GMT
Gonzalez-Paramo warned it was too early to talk of recovery. "The level of uncertainty continues to be very high," he said. "Stock markets are showing some positive expectations but other real indicators point in the opposite direction."
(Reporting by Andrew Hay, additional reporting by Brett Young in Helsinki and Harro ten Wolde in Amsterdam, writing by Sakari Suoninen; editing by Stephen Nisbet and Victoria Main)