WARSAW, Dec 9 (Reuters) - German Chancellor Angela Merkel said on Tuesday she expected the European Union to reach a compromise deal on its climate package at a summit this week.

"In this area (climate change) we made a big step forward. We can now allow ourselves some cautious optimism (on the summit outcome)," she told a joint news conference with Polish Prime Minister Donald Tusk.

Asked if Germany or Poland might veto the package, she said: "The probability of such a veto is now smaller. I can say that things could be worse." (Reporting by Karolina Slowikowska, writing by Gareth Jones)

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