The most common and most likely answer to this crossword clue is the 6 plus 8 letter word FOOL’S PARADISE
I've seen this crossword clue in The Guardian
F
O
O
L
â
€
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S
P
A
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E
More clues leading to the result FOOL’S PARADISE
Buddy explains!

The straight part
We know that "fantastic state of happiness" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case fantastic state of happiness = fool’s paradise.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.