Country lake on European peninsula (7)
I believe the answer is:
liberia
'country' is the definition.
(Liberia is an example)
'lake on european peninsula' is the wordplay.
'lake' becomes 'l'.
'on' says to put letters next to each other.
'european peninsula' becomes 'iberia' (I've seen this before).
'l'+'iberia'='LIBERIA'
(Other definitions for liberia that I've seen before include "part of Africa" , "African country, established by the US in 1822" , "Hot country" , "NW African Republic" , "State" .)