THE TAX ISSUE
ONE of the most difficult problems which the European Coal and Steel Community had to face during the first year of its life arose because of the inequality of taxes imposed upon the integrated products in the member countries. When the Community was formed, the taxes affecting coal, iron ore, scrap, and steel differed both as regards their nature and their height, and there was a sharp cleavage of opinion between the member countries as to how these differences affected the working of the common market, and how far, if at all, the existing fiscal treatment of internationally traded goods should be modified.
Because the ECSC represents only a small step away from the full independence of national economies, taxation was left under the jurisdiction of the member governments. In consequence, the treaty only mentions (and recognizes as being incompatible with the common market) those taxes which are equivalent to import duties.1 Nothing is said about the consequences for the working of the common market of the continuation of national sovereignty over fiscal policy except for the general reference to 'the effect on the coal and steel industries of existing statutory or administrative measures' (such as the operation of social security schemes) which is found in the Convention Containing the Transitional Provisions. The High Authority was enjoined to examine the position with the assistance of the governments concerned, and to propose remedial action if it established that such measures 'could seriously endanger competitive conditions in the coal and steel industries.'2
In accordance with these instructions the High Authority, soon after it had been set up, carried out preliminary investigations into the tax burdens affecting the coal and steel industries, into socialsecurity charges borne by the products in question, and into national price regulations with regard to commodities which, although they were not within the jurisdiction of the Community, affected the economic position of the coal and steel industries.3____________________