Merkel says Britain must move on Brexit bill to break deadlock

BRUSSELS (Reuters) - German Chancellor Angela Merkel said on Friday that the European Union could only agree to enter the next phase of Brexit negotiations in December if Britain provided specific assurances about its readiness to settle financial obligations to the bloc.

Speaking to reporters at the end of a two-day EU summit in Brussels, Merkel said it was "very clear" what British Prime Minister Theresa May had to do to break a deadlock in the talks that has prevented a discussion about Britain's post-Brexit relationship with the bloc, known as "phase two".

"We hope that by December we have moved along enough to allow phase two to begin but that depends on the extent to which Great Britain makes progress so that we can say that it is sufficient on the core themes of phase one," Merkel told a news conference at the end of an EU summit.

She said that the main obstacle was Britain's failure so far to signal a readiness to settle financial obligations to the bloc that EU officials estimate at around 60 billion euros.

May, under severe domestic pressure after a botched election in June that saw her Conservatives lose their majority, has said that Britain will stand by its financial commitments to the EU without offering figures.

"I think it is very clear what additional steps need to be taken," Merkel said.

Asked about suggestions from May that Britain could pursue a two-year transitional deal once it leaves the bloc in 2019 in order to buy time to clinch a more comprehensive agreement, Merkel said this was not the primary focus for now.

"The two-year transition phase is an interesting idea, no question. But it is not part of phase one of the negotiations," she said. "So it is there in the room and will be discussed at the proper time."

(Reporting by Noah Barkin; Editing by Alissa de Carbonnel)