Established working area around current European state (7)
I believe the answer is:
estonia
'european state' is the definition.
(country in Europe)
'established working area around current' is the wordplay.
'established' becomes 'est' (abbreviation).
'working' becomes 'on' (on can mean working or activated).
'area' becomes 'a' (maths abbreviation).
'around' means one lot of letters goes inside another.
'current' becomes 'I' (physics symbol).
'on'+'a'='ona'
'ona' placed around 'i' is 'onia'.
'est'+'onia'='ESTONIA'
(Other definitions for estonia that I've seen before include "European republic, became independent again in 1991" , "Country due S. of Finland" , "On a site (anag)" , "Land" , "Baltic state" .)