The Prime Minister has said discussions on the renegotiating Britain's membership of the the European Union are "going well" after meeting German Chancellor Angela Merkel in Bavaria.

David Cameron said he is confident that "difficult" issues including competitiveness and migration can be dealt with successfully.

"We believe that all these issues can be dealt with. The discussions are going well. They're hard, they're tough. These are difficult issues.

"I'm confident with goodwill - and there is goodwill I think on all sides - we can bring these negotiations to a conclusion and then hold the referendum."

"I'm even more confident after the excellent discussions I've had here in Bavaria", he added.

Summary: Cameron's EU demands

Read: EU reforms: What is David Cameron asking for?

In an article for German magazine Bild, Mr Cameron insisted the two countries were "key allies" and had to cooperate to make the union "safer and more prosperous".

Mr Cameron will hold discussions with Hungary's Prime Minister Viktor Orban in Budapest on Thursday.

Hungary has previously said it [will not support any British demands that are "discriminatory"](http://Four EU states reject any ) or limits free movement of EU citizens.