LONDON — The Latest on negotiations over Britain's exit from the European Union (all times local):
Spanish Prime Minister Pedro Sanchez says his government is "annoyed" that the divorce agreement being prepared for Britain's exit from the European Union doesn't specify that Gibraltar's future must be decided directly by officials in Madrid and London.
Sanchez told a news conference during a visit to the Spanish city of Valladolid on Wednesday that the issue is a bilateral matter and is "essential" for Spain. He repeated his threat made Tuesday that Spain will vote against the planned agreement unless its interests are taken into account.
Britain insists Gibraltar is part of the United Kingdom, but Spain argues that it is not. Madrid has never dropped its claim of sovereignty over the rocky outcrop at the tip of the Iberian Peninsula.
The issue has grown into a foreign policy test for Sanchez's 5-month-old minority government.
British Prime Minister Theresa May says she has made progress in Brexit negotiations at talks with European Commission President Jean-Claude Juncker, but that outstanding issues remain.
May said Wednesday that "further progress has been made" in drawing up a political declaration on future relations between Britain and the EU after Brexit on March 29.
She said the two sides have "given sufficient direction to our negotiators, I hope to be able to resolve the remaining issues and that work will start immediately."
The meeting with Juncker lasted just over 90 minutes. May said she will return to Brussels on Saturday for more talks, including with the Commission President.
An EU summit is planned for Sunday, but it remains unclear whether it will go ahead.
A top Spanish diplomat says negotiations are underway to find ways to formally address Madrid's demands about Gibraltar's future relation with the European Union after Britain leaves the bloc.
EU Affairs State Secretary Luis Marco Aguiriano told reporters on Wednesday that there is still time to "legally clarify" the Brexit draft agreement and "avoid interpretation" before European leaders vote to finalize it on Sunday.
Spain maintains a claim to the tiny territory at the tip of the Iberian Peninsula, ceded to Britain in 1713. Last year's EU guidelines on the Brexit negotiations effectively gave Spain veto powers over future relations between the bloc and the British overseas territory.
The Spanish government says it will vote against the Brexit deal if the agreement's wording doesn't specify that Gibraltar's future should be decided directly between Madrid and London.
Germany is working to make it easier to fire top bankers in return for a severance payment, as part of an effort to make the country a more attractive location for banks seeking to leave London after Brexit.
The finance ministry confirmed a report Wednesday by newspaper Frankfurter Allgemeiner Zeitung that a draft bill is currently being discussed within the government.
Germany has much more restrictive rules on dismissing workers than Britain. This is seen as a disincentive for Britain-based banks to shift operations to Germany's financial hub of Frankfurt when the U.K. leaves the European Union.
The draft foresees dropping the requirement for banks to justify why they're ending a contract with a highly-paid employee deemed to be "bearers of risk," such as heads of department or high-volume traders.
British Prime Minister Theresa May says that if Parliament rejects the draft divorce deal with the European Union, the U.K. could end up not leaving the bloc at all.
The withdrawal agreement has drawn strong opposition from U.K. lawmakers — especially pro-Brexit politicians who want Britain to make a clean break with the EU. They say the agreement will keep Britain bound to EU rules over which it has no say.
Andrew Rosindell, a lawmaker from May's Conservative Party, urged her Wednesday to change course and cut away "the tentacles of the EU over our cherished island nation."
During the prime minister's weekly House of Commons question period, May replied that Britain wanted "a close trading relationship with the European Union" after Brexit.
She warned that if Parliament rejected her deal it could mean "more uncertainty, more division, or it could risk no Brexit at all."
German Chancellor Angela Merkel says she hopes Spanish reservations about the status of Gibraltar after Britain leaves the European Union can be overcome by the time EU leaders meet Sunday to sign off on the draft Brexit deal.
Speaking to lawmakers in Berlin, Merkel said that while her government backs the agreement "we still have the reservations of Spain and I can't say how we will solve this issue."
The deal, which spells out the conditions of Britain's exit next year, needs to be approved by the European and British Parliaments.
Spanish Prime Minister Pedro Sanchez said Tuesday that his country would vote against the divorce agreement if Gibraltar's future isn't considered a bilateral issue between Madrid and London.
British Prime Minister Theresa May is flying to Brussels to meet European Commission President Jean-Claude Juncker in a bid to finalize a Brexit agreement between the U.K. and the European Union.
The two sides agreed last week on a document sealing the terms of Britain's departure, but are still working to nail down agreement on future relations.
EU leaders are due to meet Sunday to rubber-stamp the deal, but sticking points remain. Spain has said it will vote against if Gibraltar's future isn't considered a bilateral issue between Madrid and London.
May is under intense pressure from pro-Brexit and pro-EU British lawmakers opposing the divorce deal.
Before leaving for Brussels, she will face opponents of the agreement Wednesday during the prime minister's weekly question-and-answer session in the House of Commons.