The formation energies and electronic structure of europium doped zinc oxide has been determined using DFT and many-body $GW$ methods. In the absence of intrisic defects we find that the europium-$f$ states are located in the ZnO band gap with europium possessing a formal charge of 2+. On the other hand, the presence of intrinsic defects in ZnO allows intraband $f-f$ transitions otherwise forbidden in atomic europium. This result coorroborates with recently observed photoluminescence in the visible red region [1].