21 December 2000
Eurocrat tied up in flax scandal

By FWi staff

A SCANDAL surrounding flax subsidies has embroiled the vice-president of the European Commission, reports The Daily Telegraph.

Spanish anti-fraud investigators have announced that they intend to pursue criminal prosecutions after uncovering “generalised fraud” in EU flax subsidies.

EC vice-president Loyola de Palacio was agriculture minister in Spain between 1996 and 1999, when the worst abuses occurred.

The Telegraph says the flax subsidy programme was “one of the worst disasters in the Common Agricultural Policy”.

Spanish farmers responded to subsidies worth 500 an acre, five times that paid for wheat, by switching 91,000 acres to low-grade flax to obtain the payout.

The programme had been set up to encourage the cultivation of high-grade flax, for linen and other products, but there was no market for low-grade flax.

Moreover, much of the crop was fictitious, says The Telegraph, with much of it disappearing without a trace or being lost in mysterious barn fires.

The scandal cost the EU 45 million until the scheme ended this year.

When asked about the affair, Miss de Palacio would only say: “Let justice run its course.”