River bank encircles European city (5)
I believe the answer is:
trier
'european city' is the definition.
(Trier is a city in Germany)
'river bank encircles' is the wordplay.
'river' becomes 'r' (abbreviation for river).
'bank' becomes 'tier' (both can mean a row of similar things).
'encircles' indicates putting letters inside.
'r' inserted within 'tier' is 'TRIER'.
(Other definitions for trier that I've seen before include "one hears" , "One persevering" , "one never giving up" , "Determined person" , "One who doesn't give up - judge?" .)