Thread by @tconnellyRTE

Here is a quick update on the talks (then time for bed)...

1/ On fish, both sides are far apart, but it sounds like the UK wants the EU to jump first before it, in turn, shows flexibility. The UK is offering a three year phase in but with an upfront payment of €300m in demersal fish (ie, out of the €650m EU boats catch in UK waters)

2/ Then each year after the phase in there would be a link between EU boats getting access and a hand over of stock. EU sources say this would be disastrous for EU boats - demersal stocks are basically all the whitefish + prawn (nephrops) that make up the most valuable EU share

3/ The EU is proposing a 10 year phase in, at which point EU fleets would forego 18pc of the value of what they catch now in UK waters. Then there would be a review. The UK is said to be insisting on 80pc

4/ Source says both sides are so far apart that meeting somewhere between 18pc + 80pc wd not work. Access seems to be the battleground. This is where the UK is wielding the sovereignty tool: deciding who has access to your waters will satisfy that sense of new found sovereignty

5/ The UK approach appears to be: we cannot start talking about access until we know how much fish quota EU boats will have in order to utilise that access. And if the Commission doesn't move from 18pc then we can't have that conversation

6/ I'm told the UK will show flexibility on the €300m and access if the Commission makes that first move; on the EU side there is still the option of linking UK access to the EU's lucrative energy market in exchange for fisheries access

7/ On state aid, the UK is resisting any ex ante requirement for subsidies to be notified to an independent UK regulator. London is also resisting "direct effect" ie the ability for an aggrieved party to take action in the UK courts due to an allegedly unfair subsidy

8/ The UK is also claiming that the EU has suggested that its €750bn covid recovery fund shd be exempt from EU state aid rules, but that any UK fund wd not be exempt from the state aid provisions of the FTA (waiting to hear back from the EU side on this)

9/ The most difficult issue of all is the so-called "ratchet" or "evolution" clauses in the level playing field. The EU sees this as vital: both sides shd broadly agree to share common standards over time, but if the UK diverges the EU shd be able to take appropriate action

10/ Otherwise, the UK could simply diverge at will and give itself a manufacturing edge, while still enjoying tariff and quota free access to the single market

11/ The UK sees this as akin to tying the UK to EU standards and that if the UK exercises its sovereign right to diverge then it would be penalised for exercising that right. This is obviously a hard nut to crack...

12/ Michel Barnier will brief EU ambassadors at 0730 in the morning, and then there will be another full day of negotiations.