Failure to reach a post-Brexit trade deal would reflect badly on both the United Kingdom (UK) and European Union (EU), Angela Merkel warned as talks continued to thrash out a late agreement.
The German leader said an agreement is in the interests of all parties in the talks, but warned that it could not come “at any price”.
Her comments came after Ireland’s foreign minister warned that the collapse of talks would have “costly and disruptive” consequences.
Talks between the UK and European Union are continuing in London with time running out to strike a deal before the current transitional trading arrangements expire at the end of the year.
The thorny issues of fishing rights and the “level playing field” aimed at preventing unfair competition on standards and state subsidies remain the major obstacles to an agreement.
Mrs. Merkel told MEPs: “I hope that we will still come to a contractual solution.
“We, Britain and the member states of the European Union, are countries that are based on the same values, and it would not be a good example for the world if we didn’t in the end manage to craft an agreement.”
Dublin’s foreign minister, Simon Coveney, said he believes a deal can still be done, but that it is time to stop the “blame game”.
“The British Government was offered a much longer transition period, and they turned it down, yet they’re now blaming the EU for it – that’s just ridiculous,” Coveney told BBC Radio Ulster.
He added: “I do think a deal is possible, but it needs to be finalised this week if possible, because we really are running out of time in terms of ratification and preparation.
“But I think a deal is possible because the consequences of no deal are so costly and so disruptive, particularly for the UK and for Northern Ireland, but for the Republic of Ireland as well. “So, I think there’s a big incentive to get a deal done.”
He said the negotiating teams – led by the EU’s Michel Barnier and the UK’s Lord Frost – need to find a compromise “that both sides can live with” on the fishing and level playing field disputes.
UK Environment Secretary George Eustice suggested talks could continue for another 10 days, leaving very little time for a deal to go through the ratification process, with votes expected in both the UK and European Parliaments.