European politician cuts tax, creating a storm (7)
I believe the answer is:
tempest
'a storm' is the definition.
(tempest is a kind of storm)
'european politician cuts tax' is the wordplay.
'european' becomes 'e' (abbreviation e.g. EU).
'politician' becomes 'mp'.
'cuts' is an insertion indicator (some letters cut their way into other letters).
'tax' becomes 'test' (I've seen this before).
'e'+'mp'='emp'
'emp' inserted into 'test' is 'TEMPEST'.
'creating' acts as a link.
(Other definitions for tempest that I've seen before include "Pets met in violent storm" , "violent agitation" , "Shakespeare play with storm scene" , "A great storm of wind and rain" , "tosser!" .)