Partially economics, but there are other factors as well
In WWI, Germany used the 9mm Parabellum. In WW II, Germany used the 9mm Parabellum. In the 1950s, NATO adoped the 9mm Parabellum as military standard.
European police used 7.65mm (.32) and 9mm Kurz (.380) for many years. Unlike the US, not only is there no armed citizen tradition, but the opposite is true. Also opposite the US, in Europe, for generations, big bore handguns were seen as the guns used by criminals and terrorists. Smaller calibers were used by police. In the US, thanks to our unique history, and culture, the good guys use big bore handguns (Colt .45), while small calibers were used by criminals, more often (concealable). So, there is a cultural bias at work.
However, the simplest explanation is simple economics. Cheap ammo isn't a factor, its the guns themselves. With 9mm already available as the military weapon, you don't need to spend money on a different gun for the police.
Also, European police make extensive use of SMGs. When I was in GErmany in the 70s it was common to see a two man Polezei team, one man with a holstered pistol (9mm, the P1), and the other with a 9mm SMG, (usually HK MP5). I saw a German road block (to stop a speeder!
) with a belt fed MG1 (.308 version of MG42) between a couple of VW vans. When they get serious, they get
really serious!
And another thing about European police, they have a historical tradition of being able to shoot first, and ask questions later, if they are interested in asking questions. In the US we have a long history of questioning authority, police included. Eurpoeans do not. Our police shooting get investigated, and we require the police to proove why they had to shoot. Over there, the police are generally assumed to be in the right, and you have to proove otherwise!