The answer's different in different countries...
Spain:
Has rampant piracy because the official regulator is very weak politically compared with the radio stations. COPE's Madrid FM transmitter is legally meant to be a low powered station for one suburb, for instance. There are also many community stations operating on disputed permits (issued by regional/local authorities whose power to issue them is disputed). On top of that, there are loads of totally unlicenced operators, commercial and religious. There have been repeated attempts at crackdowns, but they tend only to affect smaller operators with fewer political connections.
Portugal: Not sure - think this is just they have lower separation standards, and many of the 0.2 spacings there are with stations not officially meant to cover Lisbon itself.
Italy: The FM band in Italy is pretty much chaos, because they've historically had no regulation at all. It was a total free market from legalisation of commercial radio (late 1970s?) until the early 1990s, with the only real regulation being that one station could take another to court about interference (but cases drag on for many years). In the late 1980s there was an "war of the wattages" where operators competed to blast each other off the airwaves; after this government intervened to ban new transmitters being added and with selective bans (e.g. special permits are required within Rome's city limits, power limits at specific sites). No new signals are now allowed, but all transmitters counted in the early 90s census are allowed to stay. In theory they shouldn't move or increase power, but they often do. There are loopholes if you've got sufficient cash and the right political views (if you can be relied on not to criticise their political party owners the Northern League, Radio Padania Libera might open up a new frequency for you and then pass on the licence, since they've managed to get a special exemption from the rules...)
Turkey and Greece: Like Italy pre-1990s. Total chaos, except for city council rules in some major cities.
By the way, FM radios sold in southern Europe tend to be pretty good quality - bad ones which would pass muster in the USA or Northern Europe tend to get taken back to the shop with refunds demanded...