By speed I assume you are talking about network latency and not server capacity (which will affect perceived speed but is not dependent on location) or bandwidth (which can affect perceived speed, but is unlikely to do so unless your site is heavy on multimedia content).
Typical cross Atlantic round trip will take about 80-100 milliseconds (or about 0.1 seconds). Moving the server to Europe would therefore have a maximum gain of about 0.1 second (more likely 0.05 seconds). So to answer your question, you need to consider if that is a valuable gain. Does the responsiveness of your site benefit from saving 50 msec?
To answer that you could consult this AlertBox article about Website Response Times.
To quote the most salient part:
- 0.1 seconds gives the feeling of instantaneous response — that is, the
outcome feels like it was caused by
the user, not the computer. This level
of responsiveness is essential to
support the feeling of direct
manipulation (direct manipulation is
one of the key GUI techniques to
increase user engagement and control —
for more about it, see our Principles
of Interface Design seminar).
- 1 second keeps the user's flow of thought seamless. Users can sense a
delay, and thus know the computer is
generating the outcome, but they still
feel in control of the overall
experience and that they're moving
freely rather than waiting on the
computer. This degree of
responsiveness is needed for good
navigation.
Basically, while navigating from one page to another you need to keep the response time down to about a second (seamless experience). A difference of 0.05 seconds is unlikely to matter. Far greater gains are to be made in optimizing the rendering of the page.
However, if your site relies on a lot of AJAX-y dynamic effects that require a round trip to the server, then you need to start thinking in terms of 0.1 seconds (instantaneous response). In that scenario, saving 0.05 seconds can make a world of difference.
See also this AlertBox article Powers of 10: Time Scales in User Experience for more on the subject.
