(BUDAPEST) - The Hungarian government hailed as a "victory" Wednesday the EU's choice of Budapest as the headquarters of a new European Institute of Innovation and Technology.

The decision would boost investment in Research and Development in Hungary and boost the country's competitiveness, Prime Minister Ferenc Gyurcsany said in a statement.

The choice of Budapest over rivals in Germany, Poland, Spain and a joint bid by the Austrian and Slovakian capitals Vienna and Bratislava, recognised Hungary's scientific prowess and was an expression of confidence in the country's future development, Gyurcsany said.

"I am proud that we could win as a result of an unprecedented national cooperation. This victory means a great diplomatic and professional success for the Hungarian government as well as the Hungarian nation," the premier said.

The choice of Budapest was announced by the EU presidency after a special meeting of European research ministers in Brussels on Wednesday.

The institute "will become a symbol of the combination of European research and innovative capabilities," said Slovenian Higher Education Minister Mojca Kucler Dolinar whose country chairs the EU until the end of the month.

The planned institute is meant to bridge the innovation gap between the 27-nation EU and major rivals, the United States and Japan.

Budapest's mayor Gabor Demszky also hailed the decision, predicting an influx of new investment into the Hungarian capital.

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