EU and Britain making "very limited" progress in talks - Merkel

The European Union and Britain have made "very limited" progress in negotiations about their future relationship, German Chancellor Angela Merkel said on Wednesday, adding there was still a possibility that no deal would be agreed. "Progress in talks is, to put it cautiously, very limited," Merkel told parliament during a Q&A session.

The European Union and Britain have made "very limited" progress in negotiations about their future relationship, German Chancellor Angela Merkel said on Wednesday, adding there was still a possibility that no deal would be agreed.

"Progress in talks is, to put it cautiously, very limited," Merkel told parliament during a Q&A session. Germany took over the six-month rotating presidency of the EU on Wednesday.

"We have agreed with Britain to speed up the talks in order to seal a deal in the autumn that must be ratified by the end of the year," she said. But Germany and the EU "must be prepared ... for the possibility that a deal doesn't materialize". Britain left the bloc on Jan. 31. A transition period, during which Britain remains in the EU single market and customs union, expires on Dec. 31 and pressure is mounting to agree a free trade deal before then.

With the two sides still far apart, a round of "intensified negotiations" is scheduled for this week. The British prime minister's spokesman said a deal was still possible but Britain was prepared for either scenario.

"We believe that there is a free trade agreement to be reached but we have also been very clear that we will be prepared for either eventuality at the end of the year, whether that be a free trade agreement or whether that be having a trading relationship based on the same terms that Australia currently has," the spokesman told reporters.