topics we have to copy with and not to continue instead going on with endless debates about
minute (if not irrelevant at all) issues. Thus, last paragraph reports my preliminary main con-
clusions but also stresses the need of further research efforts devoted to pinpoint fiscal re-
forms best suitable for Europe essential needs.
2. The missing common basic framework of the European tax systems
2.1. The survival of countries’ tax-clusters
At the early of the 1970s, European1 Countries were almost all mid-to-high fiscal pressure
countries. The total figure (taxes and social contributions) was about 33 per cent of GDP,2 and
was already over that of both the US (about 27 per cent) and Japan (still at about 22 per cent)
(EU Commission 2000; Eurostat 2000; OECD 2001). This book’s selected countries were
more or less close to the continental average, the only relevant exceptions being the then low
taxing Italy (27.5 per cent) and even more, Spain (25.6 per cent). The picture looks quite dif-
ferent by splitting overall pressure into its main headings. A wide dispersion emerges among
direct taxes and social contributions from country to country (see Table 1). Countries’ indirect
taxes (then prevailing on direct ones’) were closer to the average figure. By combining these
differences, four countries’ tax-clusters3 come out, going back to the Europe historical, eco-
nomic and institutional roots.
(i) Nordic Countries:4 the fiscal pressure was very high. It was made up in large amount
by direct and (at lesser size) indirect taxes, to pay for a comprehensive and advanced welfare
state.
(ii) Rhine Countries: the fiscal pressure was somewhat higher than the European average.
Direct taxes prevailed in some countries, indirect ones’ elsewhere. Anywhere however, social
1 EU 9 up to 1979 and EU 15 thereafter.
2 Gandullia (2003) gives more details on the structures of European tax systems during last decades.
3 Such clusters aren’t just a convenient paradigm. The estimated correlation coefficients (country data sets of Ta-
ble 1) generally are in line with the values expected according to the tax-clusters’ hypothesis both for 1970 and
1997 (data not reported here and available from the Author).
4 Nordic Countries have not been considered in this book, both for their marginality with respect to the Euro-area
and for their economic and social peculiarities.