Europe is a continent located entirely in the Northern Hemisphere and mostly in the Hemisphere Europe covers about 10,180,000 km2 (3,930,000 so mi), or 2% of the Earth’s surface (6.8% of land area), making it the second smallest continent (using the seven-continent model). Politically, Europe is divided into about fifty sovereign states, of which Russia is the largest and most populous, spanning 39% of the continent and comprising 15% of its population. Europe had a total population of about 746 million (about 10% of the world population) in 2018 As a continent, the economy of Europe is currently the largest on Earth and it is the richest region as measured by assets under management with over $32.7 trillion compared to North America’s $27.1 trillion in 2008
Though most of European countries are non-Muslim states but in 21st century Islamic finance tough small is making some ways in Europe.
Among them prominent are-
France-After the 2008 crisis, French authorities tried to attract foreign funds; Islamic finance was seen as an attraction tool. They established some legal measures to accommodate Islamic financial products with the French legal framework. This official activity was limited to the issuance of four tax instructions recognizing four fundamental contracts of Islamic finance and mitigating the tax friction of the Islamic products. The choice of tax instructions avoids political difficulties that may oppose other legislative initiatives such as bills. The insufficient legal framework and the bad tax reputation caused the escape of the foreign Islamic investors and the immobility of the internal market. Despite the presence of the biggest Muslim community in Europe in France and therefore a large potential for Islamic finance products, the French market is stagnant. The main French economic and financial actors prefer to stay in shadow and the market is left to brokers and councils which affected the public confidence in the offers. However, the training sector is characterized by some training programs that have international renown and by the first French-speaking peer-review journal.
Turkey-While there is no doubt that ṣukūk will assume an increasingly important role as a financial instrument for economic development, it is clear that Turkey will become one of the countries that will shape the future of the ṣukūk market on a global scale. With its unique geostrategic position as a bridge between Europe, the Middle East and Asia, Turkey is ideally positioned for becoming one of the most important players in the global ṣukūk market industry. If Islamic finance has not always been very popular in the country, this sector has grown steadily and ṣukūk are enjoying a steady success. The Turkish government is therefore determined to make Istanbul a financial hub for Islamic finance on a regional and global scale. With a GDP of US$769 billion in 2017 Turkey ranks 18th among the world’s largest economies and appears in this context well positioned to become one of the leading players in the global ṣukūk market industry
Germany- It is a crucial market for Islamic finance in continental Europe. A lot of attempts and pioneering work were made to establish Islamic compliant products in this market, most of them with hardly any success. With both negative and positive experiences and cases within the Islamic finance sector in Germany have been seen with a description of the current market situation. Looking at the proportion of the Muslim population in Europe, one can expect an increase over the next decades.
One country that cannot be missed as a financial hub in Europe is of course Switzerland. … Currently, there are a number of fully-fledged Islamic banks operating in the country, including Arab Bank Switzerland and Habib Bank Zurich.
Ireland-Over the last decade, Irish authorities has introduced accommodative measures to clarify and legislate for Islamic finance activity under Irish law. These measures have focused on the taxation of certain Islamic finance structures and have been designed to increase the alignment of tax treatment between these Islamic finance structures and their conventional alternatives. While there remain shortcomings in the current treatment of Islamic finance under Irish law, the steps taken to date by the Irish government to accommodate Islamic finance activity are to be welcomed and they go some way towards positioning Ireland as an economy in which Islamic finance activity is encouraged.
UK and Italy-Since the establishment of the first Islamic retail bank in the UK, in 2004; several European countries have developed a regulatory and fiscal treatment for Sharıʿa-compliant financial products and services. Italy formally joined this trend in 2010, when the Bank of Italy issued the first guidelines aimed at comparing Islamic finance with the conventional financial and banking system. Although there are no major regulatory barriers, and already there is a wide range of financial instruments which could easily be adapted to the scope and objectives of Islamic finance, some issues, such as limited political support for specific fiscal adjustments and poor technical expertise, still prevent the full integration of Islamic finance into the national market. On the other hand, the evidence arising from the analysis of the individual initiatives of market players and the legal framework showed that a number of Italian contracts and investment mechanisms could facilitate the implementation of Islamic finance for the benefits of national Small and Medium Enterprises (SMEs) and financial inclusion.
Luxembourg. The place of investment funds in this country and the legislative and political frameworks have created conducive environment for Islamic finance. Demand and supply, the regulations and the trainings which explain the leadership of Luxembourg as well as presenting the products Sharıʿa compliant is on progress.
Russia-Muslims in Tsarist Russia played a pioneering role in establishing Islamic economics and banking. The Tatar scholars ensured a profound reflection on Islamic economics. Tatar Islamic press also contributed to the diffusion of Islamic economics awareness and appealed to Muslims to enhance the economy, to develop industry and financial institutions, and to prohibit ribā. Their efforts led to the appearance of the first known journal, named Iqtisad, dedicated to the Islamic economy. This journal presented the first use of the idea of “Islamic Bank”. Tatar theologians used the mutual banks prototype to launch Islamic banking activity, as was the case of the mutual bank of the city of Samara. Sources mention that an Islamic bank was established in 1912 in St. Petersburg.
Spain-Rich Islamic legacy, particularly the development and flourishing of waqf in Al-Andalus, that makes Spain unique in the whole of Western Europe; and yet, today Islamic community does not benefit from it. There are the prospects of Islamic finance in a country where this industry is yet to set foot. Takāful as the one constituent pillar of Islamic finance that would have a realistic opportunity of implementation by way of taking advantage of a culture of mutual insurance exists in Spain. All this in a context of crisis in Takāful which, paradoxically, may provide Spain with an opportunity. Finally, one area which has seen growth in Spain: Islamic finance in academia. Islamic finance has a future in Spain, it will have to be based on an ambitious and daring agenda, namely, that of presenting Islamic finance as a ocial impact solution.