The most common and most likely answer to this crossword clue is the 10 letter word STRASBOURG
I've seen this crossword clue in Financial Times
S
T
R
A
S
B
O
U
R
G
More clues leading to the result STRASBOURG
Buddy explains!

The straight part
We know that "European city" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case european city = strasbourg.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.