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Prime Minister (Taoisaech) of Ireland Leo Varadkar and President of the European Council Donald Tusk shake hands during a press conference at Government buildings in Dublin, Ireland, December 1, 2017. REUTERS/Clodagh Kilcoyne

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BRUSSELS (Reuters) - The chairman of European Union leaders said on Monday he was encouraged by the progress of talks on avoiding a physical border between Ireland and Northern Ireland after Britain leaves the EU, which brought closer the prospect of starting trade talks with Britain.

London wants to start talks on the future trade deal with the EU as soon as possible to provide clarity for companies based in Britain on the terms of business after exiting the EU in March 2019.

But the EU said it could only start such talks once sufficient progress is made in negotiations on the terms of the divorce - a financial settlement, citizens' rights and the border between Ireland and Northern Ireland.

"Tell me why I like Mondays! Encouraged after my phone call with Taoiseach (Irish Prime Minister Leo Varadkar) on progress on Brexit issue of Ireland. Getting closer to sufficient progress at December EU summit," Donald Tusk said on Twitter.

(Reporting By Jan Strupczewski; Editing by Alison Williams)

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Reuters