The New Belle Époque: Democracy and Prosperity Since 1975 641in Britain, France, and Germany and more than 55
percent in Sweden. And it has been growing: French
government spending grew from 44 percent in 1987
to 52 percent in 1995. Although most of the taxation
that supports this social system comes from indirect
taxes—especially a Value Added Tax (VAT) hidden in
the cost of goods—Europeans do notice the cost of
these benefits. The unemployment of German work-
ers, for example, is supported by a 3.25 percent pay-
roll deduction from workers’ gross income, matched
by a 3.25 percent payment by employers; the lesser
benefit in the United States is supported by a 2.3 per-
cent tax on payroll, paid by employers. European con-
servatives such as Helmut Kohl of Germany tried to
reduce spending on social services during the late
1980s and the 1990s, but they accepted both the wel-
fare state and the taxation needed to finance it. Even
the socialist president of France, François Mitterand
(served 1981–95), who defended the welfare commit-
ment, faced hard fiscal decisions and his government
adopted many conservative policies. The French pub-
lic, however, has been one of the staunchest con-
stituencies for protecting the welfare state. When the
conservative government proposed reduced services in
1997, French socialists under Lionel Jospin won an
upset parliamentary victory.NORWAYSWEDENDENMARKFINLANDGREAT
BRITAINIRELAND
NETH.
BELGIUM
LUX.SPAINPORTUGALSWITZ.ITALYGREECETURKEYALBANIACYPRUSSERBIA &
MONTENEGROAUSTRIAHUNGARY
ROMANIABULGARIAGERMANY POLANDFRANCEESTONIA
LATVIA
LITHUANIA
RUSSIA
BELORUSSIAUKRAINEMOLDAVIARUSSIAAFRICAAtlantic
OceanNorth
SeaMed
iterra
nean SeaBalticSea0 250 500 Miles0 250 500 750 KilometersMember of the European UnionAccepted for Membership
Applicants with Longterm Hopes of
Economic Union MembershipSLOVENIACZECH REP.
SLOVAKIABOSNIAMACEDONIACROATIAHelsinkiMaastricht
Brussels
StrasbourgMaltaMAP 32.1
The European Union at the End of the Twentieth Century