David Cameron kept in the dark over EU’s bill for €2.1bn
David Cameron: ‘We are not going to write a cheque for two billion euros – it’s not happening.’

David Cameron admitted that he had been left in the dark by George Osborne for two days as he complained that he had been hijacked by Brussels over an unexpected demand to pay £1.7bn (€2.1bn) to the EU.

The prime minister said he would refuse to comply with the sudden bill, which he first learned about on Thursday, but questions were raised about Whitehall’s competence once it emerged that the chancellor had known since Tuesday. Labour said ministers should have expected the higher bill months ago.

At a press conference in Brussels, with Cameron’s face growing increasingly red as he became more and more animated, the prime minister denounced the conduct of the European commission. “It’s a €2bn bill. It gets presented with a month to go,” he said. “That is not an acceptable way to behave and it’s not an acceptable sum of money.”

Asked to explain why he had been left in the dark by the Treasury, Cameron replied: “You want to know the ‘who knew what whens’ and all the rest of it but actually, frankly, you don’t need a Cluedo set to know that someone has been clubbed with the lead piping in the library.”

The demand comes as Cameron is wrestling with dilemmas over Britain’s future in Europe and making increasingly Eurosceptic gestures to the restless backbenchers who want to deal with Nigel Farage’s Europe rejectionists. It comes weeks before a crucial byelection in Rochester and Strood, Kent, in which Ukip is fighting for its second parliamentary seat and with Cameron under increasing pressure by his party’s right to leave the EU.

The prime minister sought to regain control by blaming the EU. “It is an unacceptable way for this organisation to work – to suddenly present a bill like this for such a vast sum of money with so little time to pay it. And it is an unacceptable way to treat one of the biggest contributors to the European Union. It is an appalling way to behave. I am not paying that bill on 1 December. If people think I am they have got another think coming.”

European commission president José Manuel Barroso said the call for an additional payment should not have come as a surprise to Britain as member states’ contributions were adjusted in this way each year in the autumn. “Sometimes countries have to give more money. Sometimes they receive much more money,” he said.

A few hours later , as the prime minister visited the constituency of Rochester and Strood, Cameron signalled he might be prepared to compromise.

Asked if Britain would eventually pay up, he suggested that a lower sum could be acceptable. “If it is two billion euros, no we are not.

“That is not acceptable. We do have these changes where they look at how economies have grown. Sometimes you pay a little bit more, sometimes you pay a little bit less. But it has never happened like this before, with a €2bn bill,” he said.

The timescale for the bill from Brussels was unclear, with senior EU officials supplying confusing and inconsistent information about the basis for the calculations. Cameron said the €2.1bn referred to recalculated dues for the last four years, but the paperwork sent to the Treasury by the commission in the past few days talked of a timeframe of 1995-2013.

Other countries landed with big bills – though nowhere the scale of Britain’s – such as Italy and the Netherlands were also nonplussed and demanding explanations from Brussels.

But agreement to reduce or waive the payments may prove difficult, as some other major EU states stand to benefit to the tune of hundreds of millions of euros – with France expecting €1bn (£800m) and Germany €779m (£614m).

Labour said the row showed that Cameron was now “isolated, one foot out of the door, and ignored” in Europe and accused him of failing to act quickly enough.

The shadow chancellor, Ed Balls, said the Treasury must have known about the surcharge for “weeks and weeks and weeks” and asked: “What has our prime minister been doing? I mean, how could he suddenly be surprised about this?”

Labour’s new shadow Europe minister, Pat McFadden, said last night that he had found evidence that ministers must have been aware of the upcoming changes five months ago when they were sent an Office for National Statistics report which stated that growth figures would be used in a recalculation of Britain’s contribution to the EU budget.

“Did the Ggovernment delay making news public about this expected revision to the UK’s EU contribution because of fears about how it would play out for the Conservative party?” he said.

The commission told the member countries of the revamped figures on 17 October, EU officials said. Osborne told reporters that he first knew about the bill on Tuesday. But Cameron says he was only told on Thursday.

An emergency meeting of EU finance ministers has been convened to examine details of the recalculated budget contributions. The argument is that in the reference period, based on a new way of calculating gross national income, the UK has been outperforming the rest of the EU by some distance. Elements of the hidden economy, such as drugs and prostitution, have been included in the calculations for the first time. Budget officials from the EU member states are to meet next week in Venice and EU finance ministers meet on 7 November. The issue looks likely to dominate either or both meetings.

Farage described the EU as “a thirsty vampire feasting on UK taxpayers’ blood”, and said the prime minister was in “a very weak position” to avoid stumping up the money. “He can do nothing about this,” said the Ukip leader, whose party’s Mark Reckless, the defecting Tory MP, is the favourite to win the byelection in north Kent. “And I think he’s now being pushed into a position where, unless he brings forward his referendum promise, he’s in real political trouble.”
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PM denounces conduct of European commission as he admits Osborne knew of demand for cash two days before he did
Study shows fears over hedge fund risk pre-Madoff
LONDON (Reuters) - A survey published on Friday has highlighted disquiet among investors over hedge fund risk in the months before the Madoff scandal emerged.

A study carried out by French business school Edhec, showed that hedge fund investors were concerned about disclosure on liquidity and operational risk exposures.

The Edhec Hedge Fund Reporting Survey, which targeted 214 hedge fund managers, fund of hedge funds and hedge fund investors in the summer of 2008, found that 80 percent of respondents felt liquidity risk was not sufficiently captured in hedge fund reporting.

Most respondents also said that the quality of hedge fund reporting is a key signal of a fund's overall quality.

Hedge fund disclosure has come under the spotlight after U.S. financier Bernard Madoff was accused of running a $50 billion Ponzi scheme.

The Edhec survey found huge disparities between hedge fund managers' perception of relevant information disclosure and their investors needs.

While hedge fund managers said information on risk-adjusted returns is relatively more important to investors, investors stressed the relevance of information on past returns and extreme risks.

Edhec also said that guidelines and best practices issued by industry associations such as the Hedge Fund Standards Board and Alternative Investment Management Association fell short of providing sufficient guidance on hedge fund disclosure.

"These guidelines... rarely provide guidance on sound hedge fund disclosure. Many of the guidelines are vague and cover topics that are already standard disclosure," the survey said.

Most of Edhec's respondents are based in Europe and are medium-sized companies with assets under management of between 100 million euros ($129.6 million) and 10 billion euros.

(Reporting by Raji Menon; Editing by Sharon Lindores)
Please write a summary below.

LONDON (Reuters) - A survey published on Friday has highlighted disquiet among investors over hedge fund risk in the months before the Madoff scandal emerged.

A study carried out by French business school