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Germany may be able to hold its budget deficit within a European Union limit of 3 per cent of gross domestic product (GDP) this year, German daily Handelsblattreported today.

Finance minister Wolfgang Schaeuble confirmed on Monday that Berlin's net new borrowing could come in €10 billion lower in 2009 than the €49.1 billion estimated by his predecessor Peer Steinbrueck.

That would help push down the deficit for this year, which the government had previously been estimating at around 3.7 per cent of GDP.

Citing documents by government budget experts, Handelsblattsaid the deficit would come within the EU ceiling in 2009 before shooting up to 6 per cent of GDP in 2010 - in line with previous estimates.

European Union finance ministers on Wednesday fixed deadlines of between 2012 and 2014/15 for 13 countries to slash budget gaps to below the EU ceiling, flagging a first move to rein in fiscal stimulus as the economy emerges from recession.

Germany has said it will begin consolidating its finances in 2011 and bring its deficit back under the 3 per cent threshold by 2013 - in line with its deadline set by the European Commission.