"Yes I am optimistic," Scholz said. "The President of the United States of America and the President of the EU have agreed to carry out good and constructive talks and this is happening. Therefore there is reason to believe this will end with a reasonable result."

Scholz said risks for the German economy included the possibility of a hard Brexit, which he said would not be good for anyone, and high levels of sovereign debt, including in Italy.

He said Italy had taken a constructive approach regarding the Commission's comments on its budgets, adding this was a good sign.