The German ambassador to the European Union urged the United Kingdom on Thursday to me "more realistic" in its approach to Brexit negotiations with the bloc.
Speaking to European Policy Center think-tank in Brussels, Michael Clauss said that reaching a deal with the UK was "absolutely" possible but limited the diplomatic message when he said Britain could not have "full sovereignty and at the same time full access to the EU's internal market".
Ambassador Clauss confirmed that the EU was working based on the assumption that London would not ask for an extension to the transition period, which is set to end in December.
This means that the two sides would have to finalise a deal by October ready to begin 1 January. Otherwise, the UK would leave the EU structures without a trading arrangement in place.
The European Union has said that it would be willing to accept an extension to trade talks. The UK's chief negotiator David Frost, however, confirmed last week that "we are not going to ask for an extension and if the EU asks for one, we will not agree to that".
A permanent and comprehensive trade deal is in the works as the UK and the EU work to establish a future relationship after Brexit.
Talks remain in deadlock however as the two sides are unable to come to agreements over certain issues such as fishing rights, European Court of Justice (ECJ) jurisdiction, and free movement of people.
Commission President Ursula von der Leyen, EU Council chief Charles Michel, and UK Prime Minister Boris Johnson have arranged a meeting in June in an attempt to come to a swift agreement.
The UK formally left the European Union on 31 January but remains inside the bloc's Customs Union and Single Market until a deal is finalised or the transition period ends.