Let's number the teams and let $E_i$ denote the event that European team $i$ does not have to play against a European team.
The probability equals: $$P(E_1\cap E_2\cap E_3)=P(E_1\cap E_2)=P(E_1)P(E_2\mid E_1)=\frac57\frac45=\frac47$$The first factor is the probability that European team1 will not have to play against a European team.
(there are $5$ suitable choices out of $7$ choices in total)
The second is the probability that European team2 will not have to play against a European team under the condition that European team1 will not have to play against a European team.
(European team1 plays against a non-European team, so in this situation there are $4$ remaining suitable choices out of $5$ remaining choices in total)
If European team1 and European team2 do not have to play against a European team then it is for sure that also European team3 does not have to play against a European team.