If you're referring to the old muscle cars, there are, actually. And not a few:
Opel Diplomat
Aston Martin V8 Vantage
Aston Marin DBS V8
Jensen Interceptor
Bitter SC
Rover SD1
AMG Hammer
Iso Grifo
They also have many modern ones, mostly coming from BMW and Mercedes (the AMG models), but in the rest they have something even better: supercars, with many models coming from Ferrari, Lamborghini, Lotus, Bugatti and Maserati
Both McLaren and Porsche are more in the "sports car" category, as they are more aerodynamic than powerful and optimized for overall racing performance than just straight line and unleashing a powerful engine like the muscle cars are doing
Fuel has always been more expensive in Europe and the roads are not wide like the US. It is not conducive to large low end car culture like the US. They have exotic cars for the stupid wealthy and exports. There's also stuff like the BMW M3. The E30 M3 has always been my favorite by a long shot.
Depends on your definition of muscle. Ferrari, Lamborghini, Audi, Mercedes, BMW all make very fast cars. To me Mercedes seems to fit the muscle definition the best with cars like the Mercedes-Benz SLS AMG.
I agree that it depends on the definition. Honestly, I think that cars like the C63/E63 and BMW M5 fit the bill, especially pre - current era where every car must perform well on a racetrack. Big cars with big engines that go very fast and can fit your family. The original muscle cars were just sedans with big V8s in them.
Not really, Europe didn't want the poors to have nice things, and put massive taxes on nice things, especially large engines. So no, there really aren't any low-buck fast cars.