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Another reason Europe doesn't have extensive navies is that the colonial period is long gone. They used to have navies to protect their overseas interests (colonies), but that pretty much isn't an issue now. I think the UK probably has the largest navy in Europe. They have a few carriers, and several smaller ships, plus some subs (including nuclear subs). Some other nations have coastal defense subs (diesel), such as Sweden. They really have no need to project power, so not much call for a navy of any size. As you say, their primary concern is land-based. With the fall of Syria, the Russians no longer have a sub base in the Med, so that threat is further reduced.
