PhD in Comparative Literature: how much does the University's pedigree matter compared to opportunties for collaboration?
Since it looks like this question was voted for reopen, I'll move my comment to an answer.

Partial quote of comment from OP:


  ...I read on the University's database that most of [the small European country university department's] graduates remained there for their post-doc, teaching assistantships, etc. And this scared me considerably. I was just wondering if that should be considered a general rule for such small departments... Many of the former PhD students had papers published in good journals but, somehow, did not move from the city (none of them).


That sounds to me like a pretty big red flag - if the department isn't creating graduates that have success elsewhere, and you want to eventually find success elsewhere in your career, then they aren't providing you any evidence that their program is going to help you reach your goals. Further, it might be evidence that the department is fairly insular, and doesn't interact as much with scholars from countries like the US, UK, and Germany, which would limit opportunities to form the relationships that lead to future positions.

Of course it is possible that you could be the student to break their tradition, and it's also possible that those previous students are doing exactly what they wanted to do by staying (and it may also depend on a small sample size). Unfortunately you just don't have any evidence that graduates of that program can get positions like the ones you hope to compete for.

I think that's all the advice I can really give, besides that it's your decision and depends on how you personally weigh the various pros and cons. Eventual faculty positions and even post-docs can be quite competitive, so even at a top-ranked institution there are no career guarantees.

Best of luck to you.