Outburst as panic grips initially rattled Europe (5-2)
I believe the answer is:
flare-up
'outburst' is the definition.
(I know that outburst can be written as flare-up)
'panic grips initially rattled europe' is the wordplay.
'panic' becomes 'flap' (getting in a flap is panicking).
'grips' means one lot of letters goes inside another.
'initially' suggests taking the first letters.
'europe' becomes 'EU' (European Union).
The first letter of 'rattled' is 'r'.
'r'+'eu'='reu'
'flap' enclosing 'reu' is 'FLARE-UP'.
'as' acts as a link.
(Other definitions for flare-up that I've seen before include "Sudden outbreak (of violence, etc)" , "Suddenly get angry" , "Burst into flame or become suddenly angry" , "Suddenly burn brightly" , "Sudden burst of light" .)