UPDATE 1-We hope to keep Britain close after Brexit - Merkel
Speaking to students in Hanover, Germany, Merkel said there was scope for Britain to pay to continue to participate in individual EU programmes, such as the Erasmus student exchange scheme, but crucial questions like the Ireland-Northern Ireland border remained complicated.
"We want as few disadvantages (from Brexit) as possible," she said. "We would be happy, and it would be possible if Britain said it wanted to pay into Erasmus, and also we want ways of making goods transport as uncomplicated as possible."
But that did not mean checks on goods could be dispensed with, she said, in an apparent restatement of the EU's position that the Irish border can only be open if Northern Ireland remains within the EU's regulatory orbit.
"It is very important that we do this (Brexit) in friendship," Merkel said. "We want the relationship to be as friendly and as close as possible, and as close as the British want it to be."