In the Netherlands flying modelrockts is allowed by law from December 7th, 2006. The DRRA (Dutch Rocket Research Association), together with three other clubs, have worked out regulations with the government.
The Modelrocket Regulation (Regeling Modelraketten) regulates the use of modelrockets in Dutch airspace (see EMR library).
In the Netherlands, EU rules are active since 1994/1995 (Orange Book). It forbids everything with an explosive charge. An exception is made for pyrotechnical devices (fireworks?). Modelrocket engines are some sort of pyrotechnical devices. International model rocket engines are 'pyrotechnical toy propellant devices'. They don't have an explosive charge, but a propelling charge, especially made to lift model rockets. The biggest problem is that model rocket engines are not described and relatively unknown.
(Source: Dutch Rocket Research Assoc. / Klaas-Jan van Til)