NEW YORK, Aug 16, 2011 (Dow Jones) --Copper prices slumped to settle below $4 as smoldering concerns about global growth weighed on investor sentiment.

The most actively traded contract, for September delivery, fell 3.80 cents, or 0.9%, to settle at $3.9940 a pound on the Comex division of the New York Mercantile Exchange.

Thinly traded August-delivery copper fell 3.75 cents, or 0.9%, to settle at $3.9940 a pound.

French President Nicolas Sarkozy and German Chancellor Angela Merkel proposed a new euro-zone economic council to boost national fiscal solvency. The Franco-German leaders also will push for all 17 currency-union members to balance their public finances before next summer and adopt a tax on financial transactions. The proposals come after a week of volatile market action as investors scrutinized the euro zone's financial integrity.

"They are seeing what they can do to better contain the European debt crisis," said Justin Lennon, base metals analyst with Mitsui Bussan Commodities. "Large debt-ridden economies must maintain a certain growth rate to prevent an economic stall."

Weak economic data from Germany, the largest economy in the euro zone, compounded fears of an economic slowdown in Europe. Gross domestic product, the broadest measure of the goods and services produced by the economy, rose 0.1% in the second quarter, down from 1.3% in the first quarter.

"The tepid growth figure comes on the heels of similar numbers out of France last week, showing the economy there basically stuck in neutral," said Ed Meir, base metals analyst with MF Global. "What poor macro readings do ... is to exert gradual, but consistent pressure on prices, while keeping rallies in check."

The downbeat data is a negative sign for copper prices, as the metal is widely used in everyday goods from laptops to cars and demand for such products wanes as the economy slows.

A stronger dollar also pressured copper futures lower by damping demand from investors using foreign currencies. The dollar-denominated contracts appear more expensive to such buyers when the dollar strengthens against their currencies.

The ICE Dollar Index was recently at 73.965, up from 73.837 late Monday in New York.

Copper settlements (ranges include electronic and pit trading):
Aug $3.9940; down 3.75 cents; Range $3.9615-$4.0000
Sep $3.9940; down 3.80 cents; Range $3.9515-$4.0455