After a flick through the Fallout Bible, and The Vault, I think a European setting would be feasible. Europe after the Resource Wars is said to have collapsed into anarchy, it seems unlikely that anyone would waste bombs on such a useless bunch of failed states, as they would no longer pose a threat to anyone. In the rest of the series, we have British characters turning up in America, implying that some form of society survived in the Old World. Most refer to the UK as worse off than America, so I cannot see any real lore conflicts popping up.
Feel free to correct me if you have any official sources that debunk this, there are a lot of resources out there, and I may have missed it.
I would like to see the Fallout treatment applied to the UK, as 50's England would provide it's own unique blend of propaganda and jingoism. To simply displace American styling would be a mistake, but there is plenty enough material there for a game. Britain seems to have maintained more of an Empire this time around, imagine a more militaristic and Victorian Britain with Fallout style tech. Sounds fun to me at least.