European state chancellory taking back exhibits (5)

I believe the answer is:

tyrol

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'european state' is the definition.
'tyrol' can be an answer for 'state' (Tyrol is an example). I'm not sure about the 'european' bit.

'chancellory taking back exhibits' is the wordplay.
'exhibits' says the answer is hidden in the clue.
'back' shows that the letters should be reversed in order.
'loryt' is hidden within 'chancellory taking'.
'loryt' backwards is 'TYROL'.

Can you help me to learn more?

(Other definitions for tyrol that I've seen before include "Mountainous state of western Austria" , "Austrian Alpine state (English spelling)" , "Alpine district of Austria and Italy" , "hills here" , "Gustav ---, symphonist" .)

I've seen this clue in The Times.

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