Stefaan de Rynck, set out the EU’s position on the matter as he said there are still “huge challenges” to overcome before the end of the grace period on December 31.
He said there are only seven months left until the transition ends and there are still "a couple of tough nuts that need to be cracked".
It comes after the UK’s chief negotiator David Frost said the Government would not ask for an extension and pledged that any request by the EU for one would be rejected.
Speaking during an online event hosted by the Institute for Government, Mr de Rynck said: “We have seven months left and huge challenges.
“The future relationship… there’s a couple of tough nuts that need to be cracked still in the economic and security partnership and in the governance.”
He continued: “There is the protocol in Northern Ireland which needs to be implemented and ready to be implemented by January 1 (2021) which is again seven months from now.
“If there’s a need for more time, it needs to be decided jointly and so we have said we’re certainly open for that."
He stated the situation is made even more complicated by the Covid-19 pandemic which has brought about huge economic challenges in itself.
He posed the "open question" of whether it is wise to end the transition this year and said the EU would consider giving more time.
“David Frost when he gave a speech… basically acknowledged that the end of transition will be a negative economic situation, will generate negative economic effects short-term," he added.
“Well is this the right time to do it? It’s not in our hands, it takes two to tango as they say. So we’re certainly open to discuss an extension of transition. It’s a relatively easy decision to take if you agree on the duration and the lump sum.”
He warned the UK would need to "start talking soon" and also addressed concerns raised by Mr Frost over the “level playing field” conditions set out by the EU.
“Of course it’s a democratic decision to sign up to such commitments,” said Mr de Rynck in response to Mr Frost’s comments that the UK would not agree to sign up to EU oversight of its rulemaking in exchange for a trade deal.
“I mean, it’s something you negotiate from Government to the EU and it’s something you ratify as UK Parliament and as European Parliament.
“So there is a democratic moment where these commitments are basically accepted and I think we need to move beyond the kind of idea that signing up to international commitments that are legally binding would have some kind of threat to national democracy.
“We fully respect that the UK has left and is a sovereign country in terms of the EU regulatory orbit so it’s up to the UK to see what it can agree to.
“But stressing the sovereignty, it’s something we hear a lot, but what we should engage with is what are the legally bonding commitments you’re willing to undertake on which we will then build a close economic partnership?”