Spain probes EU flax scandal

28 May 1999

Spain probes EU flax scandal

A SPECIAL parliamentary commission in Spain is to investigate the involvement of European Union officials and their relatives in a flax racket involving EU subsidies.

Two high level officials have already been forced to resign over the last two months in a scandal which has a political dimension. A former agriculture minister Loyola de Palacio, who is a likely nominee to the European Commission, is implicated, as are members of the Socialist party.

Brussels is also investigating Spains flax payments.

Flax-growing has boomed in Spain as one of the EUs most subsidised crops, not subject to quota limits. Farmers currently claim annual payments of Pta119,347 (£470) per hectare of flax.

Cultivation of the crop was minimal just six years ago. Now it covers 91,400ha (225,846 acres), involving 4000 farmers and Pta10bn (£39m) of annual handouts.

• Financial Times 28/05/99 page 2