*hijack*
Late to the party on this one. I've got the same, a 2000 540iA with the Sport package (M5 w/o the engine). I have what appears to be the same dashboard and interior, what makes it "European"? The same year M5's have some sort of ugly chrome bezel around the gauges. Steller car BTW, mine has 201,000 miles and looks almost new.
*end hijack*
The story I heard was that the e39 was downrated by the US DOT because of some type of crash test that involved overweight Americans not wearing seat belts submarining underneath the dash in the e39. Whatever the reason, BMW added about 4 inches of Styrofoam to the bottom of the dash of the US cars. If you look at the area where the dash meets the doors in your car, you will see that the dash sticks out from the door a bit. This transition is obscured in my car by the steering wheel, but if you look at the area between the steering wheel and the center console, you will notice my dash is pulled up tightly compared to the US dash, allowing substantially more leg room. The conversion also gives you a nice little cubby to the left and below the steering wheel.
About 15 years ago, a bunch of us got into comparing the European e39s to the US versions, and undertook to get rid of a bunch of the US compromises in areas where the European stuff was superior. On the Euro dash we following the path blazed by Dave Zeckhausen:
https://www.zeckhausen.com/catalog/index.php?cPath=6446_6567 I also followed Dave on the clutch delay valve delete (the CDV was BMW incorporated into the clutch hydraulics to protect the drive train in the event US owners were inclined to do burnouts in their e39s and made smooth shifting impossible), installed European M5 floating rotors (which are no longer available in the US) along with the air ducts for front brake cooling, and installed the aspheric European side view mirrors, which provide far better visibility as compared to the US mirrors. And I went out and got a real limited slip dif, which was only available from BMW on the M5 (and which required changing half shafts in order to retrofit into the 540).