Why do European car brands sell local market cars with teeny engines?

Ok looking up various European model cars online and in magazines, it keeps coming up that the same cars I see in the USA are sold in Europe with wayyy smaller displacement engines than in the rest of the world. Cars that sell in the USA with at least a V6 or V8 get sold back there with a 4 cylinder or the smallest 6 cylinder you could imagine. Now if Europe is home to such high speed freeways and a haven for powerful and elegant cars, how can they put up with such miniscule engines in the models available to them? For example, look how briefly the BMW 318 was sold in America....