Volkswagen AG, Europe's largest automaker, called off talks with Porsche SE about a merger less than two weeks after the sports-car manufacturer's controlling families agreed to pursue a combination.

"There is currently no atmosphere for constructive talks," Christine Ritz, a spokeswoman at Volkswagen, said Sunday in a telephone interview. In a statement, Porsche said that while a meeting scheduled for yesterday had been canceled, negotiations will resume. It didn't give details.

The Porsche and Piech families, which together control half of Porsche, agreed on May 6 to create an "integrated" carmaker that would put Porsche alongside VW brands including Skoda and Audi. Talks to hash out details of a merger are on hold after VW Supervisory Board Chairman Ferdinand Piech said on May 11 that VW wouldn't help "solve" Porsche's financial problem and that Porsche must trim its 9 billion euros ($12 billion) in net debt.