Hats covering European heads (5)
I believe the answer is:
capes
'heads' is the definition.
(cape can mean a geographical head or promontory)
'hats covering european' is the wordplay.
'hats' becomes 'caps' (cap is a type of hat).
'covering' means one lot of letters goes inside another.
'european' becomes 'E' (abbreviation e.g. EU).
'caps' enclosing 'e' is 'CAPES'.
(Other definitions for capes that I've seen before include "Space for cloaks" , "Short cloaks" , "Sleeveless cloaks - promontories" , "may be worn" , "Cloaks or headlands" .)