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In many ways it depends on which part of Europe you are asking about. It de-centralized some "empire" like structures including the break up of the Austrio-Hungarian empire and led to many of the effects that would see other European countries losing their colonies (though the real effect there wasn't necessarily felt until after WWII).
The revolution in Russia leading to the eventual rise of the Soviet Union was helped in many ways by the devestation, hunger and economic collapse throughout Russia after the war (along with the purge of most of the army officers), perhaps worsened the outbreak of the flu that killed millions thanks to malnutrition and lack of nutrition throughout the continent.
Many people also point to what they call the "lost generation" given that most of an entire generation of young men from Europe died in the war and those who witnessed it never recovered from the aftermath. There was an increase in efforts to bridge national borders since many felt that nationalism led to much of the causes of the war. There was also a great growth in philosophies like nihilism since people saw so much destruction and had no faith in humans afterwards.
This is a very broad question and I imagine that you are expected to find specific answers in your textbook or lecture notes. I would encourage you to look for those in case your teacher does not have the same answer in mind that I do.
I would say that it created a broken and desperate society. I would say that the war was so traumatic that it really reduced people's faith in the way things had been before the war. Because of this, it seems to me, you have all sorts of political experiments going on in the 1920s in Europe. Just as two examples, you have fascists in power in Italy and you have communism in the Soviet Union.
In my opinion, the devastation (both physical and emotional) caused by the war led countries to try these new and radical systems.
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