UPDATE 1-Czech PM defends proposed EU accounting changes

* Czech PM: changes will not weaken stability pact

* Merkel: Prague and Berlin both committed to consolidation

(Adds Merkel)

BERLIN, Aug 19 (Reuters) - Changing the European Union's Stability and Growth Pact in a way that would cut some countries' deficit and debt levels would not weaken the bloc's budget rules, Czech Prime Minister Petr Necas said on Thursday.

The Czech Republic and eight other EU countries have asked the European Commission to consider reviewing its accounting rules and treatment of pension reform costs, arguing in an Aug 6 letter, that these were inflating their budget shortfalls despite creating longer-term benefits.

"That does not mean weakening the (Stability and Growth) Pact because our debt level would not change de facto through the reform we are demanding," Necas told journalists on Thursday before meeting German Chancellor Angela Merkel.

The bloc's budgetary rules, including a cap on public deficits set at three percent of gross domestic product (GDP), are enshrined in the EU Stability and Growth Pact. Few countries are expected to meet the deficit criterion this year.

After the meeting, Merkel said she both sides set great store by budgetary discipline.

"I was pleased to hear that the new government of the Czech Republic is strongly committed to consolidating the budget because we're both convinced that only solid finances can provide the basis for sustained economic development," she said.

Germany has already voiced scepticism about the proposal from Lithuania, Latvia, Bulgaria, Sweden, Slovakia, Hungary, Romania, Poland and the Czech Republic.

The German Finance Ministry said this week introducing exceptions in the definition of debt would make EU figures more difficult to interpret and would disadvantage governments that have chosen different ways of reforming their pension systems.

Necas also criticised German plans for a banking levy intended to make its banks contribute to the cost of the financial crisis, and said he was also against setting up a fund to rescue banks in trouble.

He reiterated his government was not aiming for fast entry to the euro, and said he expected the Czech deficit to be some 5.3 percent of GDP this year, and 4.6 percent next year.

For a wrapup on the proposed changes to the Stability and Growth Pact, double-click on [ID:nLDE67G1FP] (Reporting by Andreas Rinke and Dave Graham, writing by Annika Breidthardt; Editing by Susan Fenton)