Merkel pleased about Brexit transition deal but says many problems remain

BERLIN, March 20 (Reuters) - German Chancellor Angela Merkel said on Tuesday she was pleased that the European Union and Britain had agreed on a Brexit transition deal but added that there were still many challenges to overcome in negotiating Britain's departure from the bloc.

Speaking at a joint news conference with visiting Irish Prime Minister Leo Varadkar, Merkel said: "We were very happy to hear yesterday that there is an agreement between Britain and the European Union about the transition period."

She (Munich: SOQ.MU - news) added: "But of course we know that there are still a lot of problems to solve, especially the border issue in Northern Ireland (Other OTC: IRLD - news) , which is very sensitive and of course crucial, and all participants agree that a solution on that must be found and Germany completely supports Ireland's position on this."

On Monday Britain and the European Union agreed to a transition period to avoid a "cliff edge" Brexit next year, albeit only after London accepted a potential solution for Northern Ireland's land border that may face stiff opposition at home. (Reporting by Paul Carrel and Madeline Chambers; Writing by Michelle Martin Editing by Andrea Shalal)