The German government believes it will find a solution to its disagreement with the EU over packaging laws in the country.

Germany says it is optimistic it will reach an agreement with the European Commission on Germany's bottling laws within the three-month ultimatum set by Brussels.

The controversial packaging laws in German have established mandatory deposits on non-refillable bottles and cans of beer and soft drinks.

The EU believes the deposit system violates EU cross-border trade regulation because they protect German bottle manufacturers, because foreign drink makers cannot afford to produce packaging especially for the German market.

Germany argues that the rules are there to encourage recycling and protect the environment.

A German environment ministry spokeswoman said the government aims to reorganise the recycling system and the EU decision gave it time to react.