German Chancellor Angela Merkel dismissed the notion of Britain enjoying the access to EU single market for goods only after Brexit.
The Chequers plan proposed by the UK Prime Minister Theresa May suggests Britain would limit access for trade in capital and services in the EU single market, following UK's exit from the European bloc in 2019.
However, the German leader rejected such division, adding that the future UK-EU relationship is likely to be based on a "very, very intensive free trade area."
EU leaders have rejected Westminster's plan during a summit in Salzburg, which saw the UK government descend into Brexit-related chaos. The opposition has since then vowed to vote down Theresa May's plan. The PM's position was shaken by EU's dismissal and whether an amended or an alternative plan will be produced by the Cabinet is unclear.
Economic uncertainty, created by the Brexit negotiations stalemate and the threat of a "no deal" scenario, has stressed out businesses in the UK and EU alike. The British Chambers of Commerce (BCC) has previously pleaded for concrete answers on the conditions of post-Brexit trade. Similarly, European companies are in need of clarity, according to Mrs. Merkel, who said EU has some of its "hardest days."
The German leader also warned that Berlin will step up against any actors seeking to damage the global trade regime, referring to the introduction of US tariffs on Chinese imports.
"If the rules aren't being kept to, that means the system is being hollowed out," Mrs. Merkel said.
Being an EU member, the Chancellor also said she was grateful for the protection this membership offers Germany against direct US trade pressure.