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By Jan Strupczewski and Francesco Guarascio
HELSINKI, Sept 13 (Reuters) - France proposed a "growth compact" for the euro zone economy on Friday, a day after the European Central Bank called on governments to use fiscal policy in addition to the bank's latest monetary stimulus package to support slowing growth.
Economic growth in the 19 countries sharing the euro halved to 0.2% in the second quarter compared to the first three months and the euro zone's biggest economy, Germany, is on the brink of a technical recession, having contracted 0.1% in that period.
ECB President Mario Draghi said the euro zone economy was in a period of "protracted" economic weakness, with inflation staying low and the balance of risks tilted to the downside, as he unveiled a fresh stimulus package on Thursday, cutting interest rates and launching a new round of bond purchases.
He urged governments to spend their way out of the slowdown and use fiscal policy to help the ECB's stimulus. He singled out Germany, which is committed to running a balanced budget.
Arriving for two-day informal talks of EU finance ministers in Helsinki, German Finance Minister Olaf Scholz declined to comment on the ECB call, but French Finance Minister Bruno Le Maire said he would present a proposal for a "growth compact".
"We should not be satisfied with the level of growth in the euro zone," Le Maire told reporters.
"I would like to recall this morning the French proposal for a Compact for Growth based on three pillars: more investment from countries which have the necessary fiscal space to invest, more reforms for countries which lack productivity and competitiveness, and the necessity to reduce the level of public spending and public debt."
Countries with fiscal space to invest more is EU code for Germany and the Netherlands, both of which have been running budget surpluses for years.
"It is really now time to decide, and have more investment, more growth," Le Maire said.
European Commission Vice President for the euro Valdis Dombrovskis said the ministers would discuss how to change government spending to make more room for investment.
Ministers are also due to discuss a review of EU fiscal rules at the meetings in Helsinki on Friday and Saturday.
Austrian Finance Minister Eduard Mueller was also supportive. "The economy is weakening. The intention is to boost investments and also to strengthen the capital market," he said.
GERMAN BALANCE
More investment, although not immediately, could come from a euro zone budget that EU finance ministers will also discuss on Friday and which is to become reality from 2021, once crucial issues like ways of financing it are agreed.