Principal European state (5)
I believe the answer is:
maine
'state' is the definition.
(Maine is an example)
'principal european' is the wordplay.
'principal' becomes 'main' (I've seen this before).
'european' becomes 'e' (abbreviation e.g. EU).
'main'+'e'='MAINE'
(Other definitions for maine that I've seen before include "New England state" , "Part of America" , "N. US Atlantic state" , "North-east American state" , "North-easterly US state" .)