Does anyone know what city this is?
I know it's somewhere in Europe.
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The location is here on google maps. The name is Il porticciolo di Nervi.
A page with an alternate image can be seen on ilmeteo.it. The location is near to Genoa.
How I found it.
I came to the same conclusion as @mts that it was South facing. It looked like nobody was around with the sun fairly low and shadows cast from the East. There was also a green sun blind on one of the high buildings that indicated South facing too. I spotted a satellite dish which was also another indication.
I then started looking around Italy for south facing bays but no luck. I went all the way up to Genoa and saw what looked like an image of the church tower in one of the google maps images. Bingo.