Germany is preparing for all Brexit scenarios, including a no-deal, German Chancellor Angela Merkel’s government said on September 5.

A German government spokeswoman made clear that the draft law on a transition phase, the result of an EU agreement from March, would only come into force if an exit deal was reached.

“If we do not get to an agreement – a scenario we don’t want – there will not be a transition phase,” said spokeswoman Ulrike Demmer. “To be equipped for all events, preparations for the case of a no-deal must also take place,” she said.

As reported by the Reuters news agency, Merkel said on September 5 that the EU needed to negotiate with Britain to ensure continued good relations.

Bloomberg reported earlier on September 5 that the German and British governments had abandoned key Brexit demands, potentially easing the path for a divorce deal.

Asked to comment on the report, a government spokesman said: “The government’s position is unchanged,” the spokesman said. “The federal government has full trust in the leadership of Michel Barnier.”

However, in signs of concern about progress of the Brexit talks, Merkel said late on September 5 that success was not guaranteed.