Fancy short musical with European element (7)
I believe the answer is:
caesium
'element' is the definition.
(caesium is a kind of element)
'fancy short musical with european' is the wordplay.
'fancy' indicates an anagram.
'short' means to remove the last letter.
'with' is an insertion indicator.
'european' becomes 'e' (abbreviation e.g. EU).
'musical' with its last letter taken off is 'musica'.
'musica' with letters rearranged gives 'casium'.
'casium' placed around 'e' is 'CAESIUM'.
(Other definitions for caesium that I've seen before include "Rare metal element, Cs" , "Metallic element with atomic number 55" , "Chemical element, symbol Cs" , "Reactive metal element" .)