Negotiations over Britain’s withdrawal from the 28-strong bloc have stalled after negotiator for Brussels, Michel Barnier, refused to continue until a financial settlement was agreed.
Many member states and politicians have sought to “punish” Britain for voting to leave, and leaving a gigantic black hole in the EU budget.
However, Mrs Merkel has agreed with Downing Street the talks must continue.
Mrs May and the German Chancellor agreed the need for “continued constructive progress” May’s office said.
Berlin and London also agreed on Sunday they remained committed to the nuclear deal with Iran after a US decision to decertify the agreement, a spokeswoman said after a call between Prime Minister and German Chancellor.
The spokeswoman said: ”They agreed the UK and Germany both remained firmly committed to the deal.
“They also agreed the international community needed to continue to come together to push back against Iran’s destabilising regional activity, and to explore ways of addressing concerns about Iran’s ballistic missile programme.”
More follows…