Good morning. EU interior ministers will today discuss a possible delay to the continent-wide rollout of a new digital border system, on fears that it isn’t yet ready for action, as the FT revealed last month.

Today, our finance correspondent reports on a warning from the EU’s auditor that billions of euros are being misspent, and I explain why Ursula von der Leyen is in Moldova.

Dodgy expenses

Auditors have found that EU funds are increasingly being misspent, just as discussions start on an ambitious overhaul of the bloc’s next common budget, writes Paola Tamma.

Context: Each year the European Court of Auditors reports on how the EU’s more than €100bn-a-year budget is spent. The vast majority is in payments to member states, for instance to fund infrastructure, regional development projects or agricultural subsidies.

The increased misspending was largely a result of time pressure, the auditors said, as the period for countries to spend certain leftover funds from the previous budget period ended in 2023. In addition, countries have to spend hundreds of billions in post-pandemic recovery funds by 2026.

“Some of it is down purely to the capacity of the body to control expenditure in an orderly fashion, and they’re just overwhelmed,” Tony Murphy, ECA head, told the FT ahead of today’s publication of its yearly budget report.

Last year, nearly €11bn out of €191.2 in budget payouts was misspent, the auditors estimated, including because of accounting errors. That amounts to 5.6 per cent — up from 4.2 per cent in 2022 — continuing an increase over the past three years. Auditors also detected 20 cases of suspected fraud.

Cohesion funds, which are dedicated to regional development and make up a third of the EU budget, accounted for the bulk of the misspending, with errors up 45 per cent compared with last year.

Auditors also reviewed €53.5bn in post-pandemic recovery payouts, which countries receive once they implement pre-agreed reforms. But auditors found that in 16 out of 452 examined cases, payouts were granted even though the countries hadn’t met the requisite conditions.

That is problematic, especially for those countries that are net receivers of EU funds. The European Commission is planning a budget overhaul that would link all payouts to reforms and pre-agreed investments — much like under the recovery fund — something those countries are wary of.

It also complicates Brussels’ plans to ask net budget contributors, such as Germany, to inject more cash into the next EU budget, due to start in 2028.

The commission said that it “agrees that improvements are needed, and it is acting accordingly”.

Chart du jour: Dark side

An FT investigation has tracked down how Russia built its “dark fleet” of oil tankers, acquiring at least 25 vessels via London and Dubai to evade western sanctions.

Brussels bearhug

European Commission president Ursula von der Leyen will meet Moldova’s Maia Sandu today bearing gifts — and moral support.

Context: Moldova is an EU candidate country and began formal accession talks in June. The country applied for membership in response to Russia’s war against neighbouring Ukraine, a conflict that has imperilled its security and economic stability.

Von der Leyen will use the visit to lay out an EU “growth plan” for Moldova. The initiative, which has already been launched for western Balkan countries, involves increased financial assistance and trade benefits, in exchange for reforms to integrate their economies into the EU’s single market, and prepare them for eventual membership.

Moldova’s package will be “significant and substantive”, according to a person involved with the preparations.

A Moldovan official said it would “provide the economic leap Moldova urgently needs to overcome the consequences of the war next door, push forward with reforms, and improve the lives of all Moldovans”.

The EU’s economic bear hug isn’t just about economic growth, however. Brussels is also striving to keep Moldova on a pro-EU path, and not see Sandu and her pro-western government toppled by a destabilisation campaign orchestrated and funded by Moscow.

Russia is seeking to influence a double-headed ballot in 10 days time when Moldovans will be asked to choose their next president, and vote in a referendum on enshrining EU membership in its constitution.

Officials in both Brussels and Chișinău are fearful of either Sandu — who is running for a second term — being replaced by a pro-Russian rival or the referendum failing.

Brussels’ growth plan “will help Moldova become stronger, more resilient, and deeply integrated with Europe as we advance towards EU membership”, the Moldovan official added.

“It will also demonstrate that democracy, even under pressure from Russia, brings real progress and improves lives across the country.”

What to watch today

1. EU home affairs ministers meet in Luxembourg.

2. Nato secretary-general Mark Rutte meets UK Prime Minister Sir Keir Starmer in London.

3. Ukrainian President Volodymyr Zelenskyy travels to London and Paris.

Now read these

A LUCKY player who scooped a life-changing Postcode Lottery prize refused to believe she had won – until a key sign revealed it was fate.

Sanna Babar, from West Yorkshire, was stunned when she discovered the eye-watering £111,111 windfall after entering the weekly Millionaire Street prize on Monday.

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The whopping draw saw nine thrilled neighbours on Shann Crescent, Keighly, share £1million after their postcode BD21 2TN hit the jackpot.

Mum-of-two Sanna told the Postcode Lottery she couldn’t believe her win.

“Wowee! That’s not real. Oh my God, is this real?,” she said.

But she later said it was “meant to be” as her birthday is coming up.

She added: “I’m going out-out! I was going to go to Bradford, but I think I can go a bit further than that now.”

Her and overjoyed husband Tahir Mehmood are also planning on whisking their family away on a holiday to Disneyland.

Sanna said: “We were thinking of going to Disneyland Paris in August next year, but it could be Florida now!

“I was trying to save up money, but I don’t need to do that now and I could bring my mum and dad too.

“It was a sort of fantasy before, but I’m going to do it.”

The mum-of-two said how she can’t wait to ring my mum” and spread the incredible news.

Meanwhile, another winner on the street nearly missed out on collecting his £111,000 prize.

Michael Whitaker, from Keighley, had to beg his boss for the day off – and colleagues weren’t impressed.

The self-confessed adrenaline junkie rang up his boss to ask for the day off so he could be given the huge cheque.

He said: “I rang my boss and told her Postcode Lottery are here. But I had a design and compliance finance meeting at 11am and I had all the figures.

“Luckily, my boss was ecstatic for me and said she wouldn’t tell anyone in the meeting as to why I couldn’t make it.”

Michael hopes to use his jackpot towards a “once-in-a-lifetime” tour around the Norweigan Fjords.

“When I saw the cheque, I thought £11,000 and then… I processed it and there was six digits! It’s incredible,” he said.

He also dreams of taking his new motorbike, a Triumph Tiger 900, on a road trip.

“I’ve got to an age where I want to see more, and I recently bought the motorbike to go adventure riding.” he said.

He added: “You have dreams but they’re not dreams anymore now. This brings them into reality.”

The clerk landed the massive cash prize along with eight of his neighbours in Shann Crescent, Keighly, after their postcode BD21 2TN landed the weekly Millionaire Street prize on Monday.

Every cheque was worth £111,111.

How to play the People’s Postcode Lottery?

For just £12 a month, players can sign up through the official website to have a chance of winning millions of pounds.

Once signed up, players are automatically entered into every draw and prizes are announced every day of each month.

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Tickets play for the Daily Prize, worth £1000 and revealed every single day.

Tickets could also win a jackpot of £30,000 for Saturday and Sunday’s Street Prize draws.

People’s Postcode Lottery also offers a £3million Postcode Millions draw each month – where your ticket plays for a share of the cash prize fund.

Winners are notified by email, text, post, or phone call, depending on the prize they win.

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Jackpot winners are visited by the lottery team in person.

It comes as a lucky player doubled their £200,000 Postcode Lottery win by using a clever trick – make sure you don’t miss out.

Jo Deighton from Shoreham, West Sussex, was gobsmacked when she scooped nearly an eye-watering quarter of a million pounds.

Elsewhere, one punter who bagged a £410,000 jackpot told how no one believed her – not even her husband.

Leyla Eaton’s jaw dropped after discovering she’d scooped the life-changing prize.

The mum-of-two entered when she was struck by a “strong feeling” a huge windfall was coming her way.

Meanwhile, one winning couple who scooped £142,000 in the raffle revealed their plan – but it may surprise you.

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Chinese stocks rose on Thursday in volatile trading ahead of a weekend press briefing from the country’s finance minister, as the central bank launched a facility to make it easier to buy shares.

The benchmark CSI 300 index rose almost 3 per cent on Thursday after closing down 7 per cent on Wednesday in its first loss in 11 consecutive sessions. Hong Kong’s Hang Seng index was up 4.2 per cent after posting its worst daily loss since 2008 on Tuesday and falling further on Wednesday.

The CSI 300 has surged by more than 30 per cent since late September after the Chinese government unveiled a stimulus package to revive economic confidence. The rally started to fade this week as investors began to question the government’s plan to boost the economy and its capital markets.

“Buy everything China-related was what we observed over the past two weeks,” said Richard Tang, China strategist and head of research Hong Kong at Julius Baer.

After a few days of heavy profit-taking, Tsang said the offshore market was moving on to a second phase of the rally, “which features slower gains, higher volatility but with the basics — earnings and valuations — back in focus.”

Thursday’s rebound came a day after Beijing announced a Saturday press briefing with finance minister Lan Fo’an, fuelling expectations that the government would announce more stimulus measures.

“The market is certainly looking for hints of more policy support coming”, said Jason Lui, head of Asia-Pacific equities and derivatives strategy at BNP Paribas.

China’s central bank moved forward on Thursday with a scheme to enable domestic financial companies to buy more stocks, a tool designed to stabilise the market and shore up liquidity.

The facility allows non-bank financial companies to borrow from the People’s Bank of China to buy equities, with bonds, stocks or exchange traded funds serving as collateral.

The bank said it was accepting applications from eligible securities groups, funds and insurance companies to pledge ETFs, bonds or constituent shares of the CSI 300 index for more liquid assets such as sovereign bonds and central bank notes.

The funds had to be invested in th stock market, the PBoC has said.

The size of the Rmb500bn ($70bn) tool “can by expanded depending on market conditions”, said the bank. The mechanism is designed to “enhance the inherent stability” and “promote healthy development” of the capital markets, it said.

Experts said the tool was similar to the US Federal Reserve’s Term Securities Lending Facility, which allowed dealers to borrow liquid assets such as Treasuries for financing by pledging illiquid collateral such as corporate bonds.

It was created during the 2008 financial crisis and revived in 2020 during the pandemic.

One major potential private credit deal to start: HPS Investment Partners is talking to potential buyers, including BlackRock, as the top leadership of the private credit firm looks towards a deal that could value the business at more than $10bn, according to people familiar with the process.

And an obituary: Ratan Tata, who was one of India’s best known businesspeople and led his family conglomerate on a bold international expansion, has died aged 86.

In today’s newsletter:

• US weighs splitting up a tech giant

• Rio Tinto revs up its battery business

• OpenAI’s new model to fend off hostile takeovers

Has the end of US monopolies arrived?

It’s no secret that antitrust regulators in the US have ramped up their scrutiny in the past few years. They’ve gone after (with varying success) Microsoft’s bid for Activision Blizzard, Coach owner Tapestry’s proposed tie-up with Capri and just last month, Visa.

But one company has borne the brunt of regulators’ ire: Alphabet’s Google. Now the Department of Justice is ratcheting up the stakes.

This week, the agency said it was considering asking a judge to break up the tech giant to end its monopoly in online search. If it does pursue a split, the enforcement action would be the boldest effort in more than two decades to rein in a tech giant, since it (unsuccessfully) tried to split up Microsoft in 2000.

This isn’t the DoJ’s first time attempting to break up a conglomerate in recent months. In May, the agency said Ticketmaster’s parent, Live Nation Entertainment, “suffocates its competition”.

It was blunt: “It is time to break up Live Nation-Ticketmaster”, US attorney-general Merrick Garland said at the time.

Now the DoJ is pivoting its sights to Google, the FT’s Stefania Palma and Stephen Morris report. The agency laid out its case on Tuesday in a court document that detailed the sanctions it might seek from Amit Mehta, the judge presiding over the case in Washington, DC.

A smaller Google would have tremendous implications for not just the business of online search, but also the broader corporate world. Alphabet accounts for more than 4 per cent of the S&P 500 stock market index.

The DoJ weighing a split-up shows how far the government is willing to go to shift the balance of corporate power, the FT’s Elaine Moore writes. If these big antitrust fights start to yield results, the US tech industry will start to look very different. Big Tech could become Medium Tech.

Google was quick to respond with its own press release on Wednesday. It wasn’t pleased.

“Government over-reach in a fast-moving industry may have negative unintended consequences for American innovation and America’s consumers,” the company wrote. “We look forward to making our arguments in court.”

However, even if the DoJ gets Mehta’s backing to break up the company, change is not imminent. Google has vowed to appeal all the way up to the Supreme Court, a process that could take years.

Mining giant Rio Tinto repositions for EVs

Mining companies all over the world have come to realise future growth lies in producing the materials needed for electric vehicles.

Rio Tinto is making inroads into that market with a $6.7bn cash deal for Arcadium Lithium, in what is the biggest-ever lithium acquisition. It will catapult Rio Tinto to becoming the third-largest producer, the FT’s Leslie Hook writes.

Even though lithium prices have plummeted recently, the group is paying $5.85 per share — a 90 per cent premium to Arcadium’s closing price on October 4 — for the company.

“What we are doing today is saying: we are committed to lithium,” Rio’s chief executive Jakob Stausholm said in an interview. The deal was “not transformative in terms of size, but it is more transformative in terms of how it shapes our portfolio”, he added.

The deal isn’t a bargain, Lex writes. Timing M&A with volatile metals markets can be tricky. Memories of Rio Tinto’s disastrous $38bn takeover of Canadian aluminium group Alcan in 2007 still loom large, and Arcadium is its biggest acquisition since.

Lithium’s price has dropped 55 per cent in China in the past year, largely because of a glut in the market and lower than expected demand from EVs. The acquisition will add to Rio Tinto’s array of major production lines, which include copper, aluminium and iron ore.

Some are sceptical of the sticker price. Richard Hatch, analyst at Berenberg, said the deal was “sensible” but that the price would “raise eyebrows”.

Now, the question is whether the deal can get past Arcadium’s shareholders. At least one, Blackwattle, has come out against the proposed tie-up, saying the company should consider walking.

OpenAI: public benefit meets poison pill

“Dear ChatGPT: Is there a way to fend off unwanted investors and look cool doing it?”

For Sam Altman’s OpenAI, the answer might be yes.

OpenAI is considering transitioning to a public benefit corporation, a new and largely untested corporate structure, which legally requires a company to consider the shareholders’ interests as much as other stakeholders, such as employees or society.

As the FT’s Cristina Criddle and Patrick Temple-West report, a PBC’s multipronged requirement gives OpenAI power to say “go away” to an aggressive investor that might want to squeeze more profits out of the company.

Notably, AI rivals Anthropic and Elon Musk’s xAI are already PBCs.

In 2020, Delaware revised its PBC rules to encourage more businesses to adopt the structure. During the 2021 stock market mania, several companies went public as PBCs, including Allbirds, Coursera and Warby Parker. Most of the public PBC companies are young, consumer discretionary businesses eager to look hip with their customers.

So the PBC model also gives businesses a bit of a marketing boost. That could be handy if AI executives are hauled before Congress to testify. A legally required social benefit might spare AI executives some heat as they are already under fire from Senator Elizabeth Warren and others over safety concerns.

It’s been decades since Martin Lipton, co-founder of New York law firm Wachtell, Lipton, Rosen & Katz, invented the poison pill shareholder defence to fend off activists.

Now, with the AI companies, cutting-edge technology is combining with cutting-edge corporate governance to churn out whole new corporate playbooks.

Job moves

• I Squared Capital has hired Guillaume Pepy as a senior policy adviser. He was previously the chief executive of French national rail group SNCF.

• Match Group has appointed Steven Bailey to replace Gary Swidler as the company’s chief financial officer starting in March. Bailey has been the company’s senior vice-president for financial planning and business operations since 2022.

Smart reads

Mittelstand shrugs While Berlin has expressed stiff opposition to a potential bid by UniCredit to buy Commerzbank, Germany’s family-owned businesses aren’t sure it would be such a bad thing, the FT reports.

Thwarting a takeover Alimentation Couche-Tard has come back to 7-Eleven with a higher offer worth about $47bn, the FT reports. Can the beloved convenience store chain mount a tougher defence?

Changing of the guard As Credit Suisse collapsed, Apollo Global Management seized on the opportunity to snatch Atlas SP Partners, one of the firm’s most lucrative businesses, Bloomberg reveals. The tie-up hasn’t been so seamless.

News round-up

Seven & i shares jump after Couche-Tard says it is ready to pay $47bn (FT)

Europastry’s ‘frozen croissant’ IPO delayed a second time (FT)

Boeing withdraws pay offer to striking factory workers (FT)

KPMG US chief calls for urgent reform to halt slide in accounting ranks (FT)

China’s AI start-ups race to crack US market (FT)

Hays Travel hunts for deals to expand presence on UK high street (FT)

Hurricane Milton could cost $60bn in insurance losses (FT)

High style

The Swiss resort of Verbier has no shortage of smart places to stay, but one address opening this winter will stand head and shoulders — and more than a thousand vertical metres — above all the others.

The Cabane Tortin, due to open its doors on December 14, will offer all the usual trappings of a luxury chalet, including a private chef, two live-in hosts, a dedicated mountain guide, Egyptian cotton sheets and fluffy robes, a sauna and visiting therapists for massages and facials. But it will do so in a remarkable location, perched alone on a rock band above the Tortin glacier, 2,994 metres above sea level — higher than the vast majority of the Alps’ basic climbers’ refuges. There will be fine wines but also an emergency oxygen supply for anyone struck by altitude sickness.

Guests will arrive by skiing off piste from the top of the celebrated Mont-Fort cable car, or by trekking or ski touring across the glacier from the lifts at the Col des Gentianes (for the less active, it is also possible to take a caterpillar-tracked buggy or helicopter). Designed by Norwegian architects Stinessen, with a stark concrete base and huge glass sections, it is already being compared to a Bond villain’s lair (in fact it stands 24 metres higher than Blofeld’s fantastical hide-out atop the Schilthorn in On Her Majesty’s Secret Service).

The original Cabane Tortin was built on the site in 1981 by members of the ski club in the nearby village of Nendaz. It later became a refuge, offering meals and basic accommodation to climbers and ski tourers, and passed into the ownership of a private company based in Sion. In 2021 it decided to demolish the cabin for a radical ground-up rebuild — and a radical new business model.

Upstairs, it now sleeps eight in great comfort, with prices starting at SFr60,000 (£53,000) for six people, or SFr68,000 for eight, for three nights. The staff sleep downstairs, where there is space for eight in four double “pod” rooms. However, a condition imposed by the commune of Nendaz, which still owns the land, demands continued public access — so when the upstairs isn’t occupied, the downstairs will become available as the “Bivouac des Gentianes”, a sort of deluxe mountain refuge (at SFr2,000 per night for eight). On those occasions, the two lucky hosts will get to move to the rooms upstairs to become the most lavishly accommodated hut guardians in the Alps. cabanetortin.com

The ski pass that can save your life

After more than five years of development, a new type of ski pass launches in Italy this winter which could revolutionise on-mountain safety and guard against every skiing parent’s nightmare — losing their child somewhere on the slopes. LifePass uses a combination of GPS, cellular and LoRa (low-powered radio) technologies to track and transmit its location. If a skier has an accident, they will be able to press an SOS button on the pass to instantly send their location to ski patrollers and summon help. If a child has a pass in their pocket, their parents could sit in a restaurant and monitor their movement around the resort via a map on a smartphone.

The pass was created by Mountain Technologies, a start-up with bases in Belfast, Verbier and Milan, in partnership with the Italian resort of La Thuile, and early input from the digital mapping company FATMAP. This first year, the pass will only be available in La Thuile but Mountain Technologies plans to release it in five more resorts next winter.

The pass is the same size as a credit card but about a centimetre thick; its battery lasts for a week. Pricing has yet to be confirmed but it will be no more than €4 per day above the cost of the conventional pass; users will pick the passes up from (and return them to) the existing ticket offices or use self-service dispensing machines in hotels and hire shops.

Whereas mobile phones offer some tracking functionality, they have numerous drawbacks — cellular service is unreliable in the mountains, tracking apps drain batteries rapidly and screens will stop working in freezing conditions. Apple AirTags and similar products rely on Bluetooth, so only transmit a location if someone else with a phone passes nearby — unlikely in a remote mountain location. For resort operators, LifePass also offers the advantage of being able to track skier flows with far greater precision than previously possible. lifepass.eu

The beautiful north

With snowfall in the Alps becoming increasingly capricious, tour operators are looking north, launching a swath of new trips to Scandinavia, including to some remote, offbeat destinations.

Ski Solutions, for example, will be offering its first trips to Narvik, a small port town 220km north of the Arctic Circle with six lifts, where between December 5 and January 6 the sun does not rise (thankfully the pistes are floodlit). Also new for Ski Solutions, Crystal and Iglu Ski is Gausta, west of Oslo, a resort that has remained under-the-radar partly because its highest peak, and the mountain railway inside it, was a top-secret Nato listening post from 1959 until the 1990s.

The airline Norwegian has new direct flights from Gatwick to Narvik starting on November 2, and from Bergamo to Narvik the following month. Lufthansa subsidiary Discover Airlines has a new flight from Frankfurt to Alta, in northern Norway, starting in December; Tui Airways launches a service from Manchester to Oslo the same month. And in February, SAS will restart a service it last operated before the pandemic, from Heathrow to Scandinavian Mountains Airport, where the runway is less than 10km from the pistes at Stöten — a resort being newly offered this winter by Ski Scandinavia.

Despite the ski areas typically being much smaller than those in the Alps, Andy Hemingway, Norway and Sweden product manager at Ski Safari, says their popularity is being driven by empty slopes, lack of lift queues, scenery, reliable snow and improving exchange rates (£1 is worth about NKr14, up from less than NKr12 two years ago). “Once our customers visit, they just keep going back,” he says.

Deer Valley doubles in size

A post-pandemic boom in skier numbers in the American Rockies has fuelled expansion at numerous resorts, but none matches the ambitions of the project under way at Deer Valley, Utah. This December, the self-styled luxury resort — slogan “ski the difference” — will unveil the first stage of the biggest terrain expansion in the US for 40 years.

Skiers (snowboarders remain banned) will find three new lifts and 300 acres of additional terrain. Next year, there will be six more new lifts and 100 extra runs. The complete “expanded excellence” project will see a total of 16 new lifts, more than doubling the resort’s terrain to 5,726 acres, and seven new hotels.

The project dates back to 2014, when New York-based Extell Development Company began acquiring land to the east of the existing resort. Known for Manhattan skyscrapers including Central Park Tower, Extell had no prior experience of developing ski resorts but hatched a $2bn plan to build a brand-new resort called Mayflower. Last year, Extell and Alterra Mountain Company, the owner of Deer Valley, announced they’d reached an agreement under which the Mayflower brand would be abandoned and the new terrain would be operated by, and integrated with, Deer Valley.

Pink Snow 2024

This article is part of our annual winter sports special, Pink Snow — look out for a series of pieces published throughout the week

Neighbouring Park City Mountain Resort remains the largest ski area in the US with more than 7,300 acres, and is separated from Deer Valley by nothing more than a rope and a no-entry sign. Unfortunately, fierce rivalry between Alterra and Park City’s owner Vail Resorts means the alluring prospect of creating one of the world’s true mega resorts — simply using a pair of scissors — is unlikely any time soon.

The open-air gondola

It is a bumper winter for new cable cars. Three years after Courchevel’s biggest cable car, the Saulire, was damaged in a testing accident, it will finally reopen on December 6, with new cabins offering floor-to-ceiling laminated glass windows. In Switzerland, there’s a new cable car from Stechelberg to Mürren which, at a maximum incline of 58 degrees, claims to be the world’s steepest. Meanwhile Grouse Mountain, just outside Vancouver, is asking members of the public to submit artworks to be wrapped around its new gondola.

The prize for the strangest cable car update, however, goes to La Plagne in France. Its new offering, Aérolive, consists of two red gondolas stripped back to a simple metal frame. Up to six passengers are secured by harnesses and can lean out of the gondola as it climbs; the floor is a grill through which they can look down to the pistes below.

The Aérolive cabins will be added on demand to the Glaciers lift, introduced last year, which runs up to 3,080 metres on a flank of the Bellecôte, the highest point in the ski area. What the resort calls an “exhilarating new experience set to take adventure seekers to new heights” will cost €55, but will it be that much more exciting than riding a chairlift?

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