There are “encouraging” signs the UK Brexit team could start trade talks with the EU as early as December, Angela Merkel has told reporters.
As Theresa May arrived in Brussels for a two-day summit on Thursday, Britain had given up on the EU27 green-lighting talks on its future trading relationship with the bloc, but the German Chancellor has offered hope.
Chief EU negotiator Michel Barnier said last week that insufficient progress had been made on divorce bill for trade talks to go ahead.
But Merkel told journalists: “Tomorrow we will also discuss the question of Great Britain’s exit. There has been progress.
“Michel Barnier will tell us more about that. From where we are now, it [progress] is not sufficient enough to enter the second phase, but it is encouraging to move on with the work so that we can reach the second phase in December.”
Before formal talks got under way in Brussels, May was seen deep in conversation with Merkel and Macron.
The Prime Minister made clear she was not expecting a breakthrough this week, framing the summit as a chance to “take stock” of progress so far.
At the European Council summit, May said she would be setting out “ambitious plans” for further negotiations and that she wanted to inject a new “urgency” into discussions on the post-Brexit rights of EU citizens living in the UK and Britons on the continent.
The PM was due to have dinner with EU27 leaders on Thursday night.
May said: “This Council is about taking stock. It is also about looking ahead to how we can tackle the challenges that we all share across Europe.
“That means of course continued co-operation, co-operation which must be at the heart of the strong future partnership that we want to build together.
“Of course we will also be looking at the concrete progress that has been made in our exit negotiations and setting out ambitious plans for the weeks ahead.
“I particularly want to see an urgency in reaching an agreement on citizens’ rights.”
Jeremy Corbyn was also in Brussels to meet Barnier and three EU national leaders.
The Labour leader accused May of presiding over “chaos” in the Brexit talks and said his party “stands ready to take up responsibility for negotiations”.
Corbyn also warned that doubt over the future of banking giant Goldman Sachs in London highlighted uncertainty around talks.
After meeting Barnier, he said Britain should agree to pay what is legally owed for splitting from Europe.
But he declined to put a figure on the divorce bill.
Corbyn said: “It’s not a good thing if companies of any sort - manufacturing, services or anybody else - are thinking of leaving.
“This really highlights the uncertainty surrounding the Government’s conduct of these negotiations.”
Goldman Sachs chief executive Lloyd Blankfein took to Twitter to detail a recent trip to Frankfurt, where the US bank is planning to shift some of its UK operations after Brexit, and said he would be “spending a lot more time there”.
The bank employs around 6,500 people in the UK and will at least double its 200-strong employee base in Frankfurt as part of its Brexit contingency plans.
Before travelling to the Belgian capital, May issued a message to the estimated three million EU citizens in the UK, telling them that she wants them to be able to stay after Brexit and that a deal on their rights is “in touching distance”.
In an open letter posted on her Facebook page and mailed to 100,000 EU nationals, May repeated her message that “EU citizens living lawfully in the UK today will be able to stay” after Brexit.
Arriving at the Brussels summit, French President Emmanuel Macron said there had been attempts to create divisions within the EU, but that the 27 would show “very strong unity in the discussions on Brexit”, with shared goals and support for Barnier as the EU’s sole chief negotiator.