BUDGET: DE PALACIO AND LAMY OVERSHADOW 1999 RATIFICATION PROCEDURE.

• Position: Brief Article

The Spanish flax issue is resurfacing in the Committee on Budget Control via two reports in the making: one by Herbert Bosch (PES, Austria) on the 1999annual report on combating fraud, a report due to be adopted in the Committee stage on 27 February, and another by Freddy Blak (PES, Denmark), dealing with the 1999 discharge, on which the Committee is due to announce its verdict for 21 March ahead of a plenary session vote in April. The affairs sprang up in early 1995 when the European Commission began to get uneasy about the increased level of flax production in Spain. The industry had virtually disappeared in 1965 but then skyrocketed half way through the decade to increase by 1 261% between 1994 and 1997. The Directorate-General for Agriculture conducted some investigations in July 1995 and June 2000, which served to highlight suspicions about fraud in Castilla-y-Leon, Castilla-La Mancha and Extremadura. An inquiry was conducted by UCLAF in July 1998 and another by OLAF , in co-operation with the Spanish anti-fraud authorities, ended in December 2000. OLAF's report is expected to appear in late March.Pending the report, more and more pressure is being put on the Vice-President de Palacio, who served as Spain's Farm Minister between 1995 and 1999. During her interview on 30 August 1999, Ms de Palacio said she would hand in her resignation if OLAF's report were to call her into question. In any event she has already been cleared by a...