Situation of Europeans prior to discovery of the New World?

Answer 1

For most Europeans, the discovery of the New World didn't make any difference to their daily lives. Most of them were peasant farmers with little money or property. This continued for hundreds of years after the discovery of the New World.
One thing that did change due to the discovery of the Americas was that coins became much more common, and there was huge inflation as people came back with vast amounts of it (as compared to what was in Europe at the time). Prior to the discovery, trade was difficult due to the lack of generally accepted units of exchange such as gold or silver coins.
Also, the transition had already begun from feudal lords loosely aligned towards a largely ineffective monarchy towards a more centralized form of government. Improvements in both transport and weaponry allowed the central government to administer to and control more land than it could have previously.
Trade had led to the improvement the road system, and advances in navigation and ship-building had improved sea trade as well.
This was prior to the Reformation, so that while some voices of dissent had been raised, such as Huss, Wycliffe and Zwingle, the continent accepted Roman Catholicism as the one true religion.

Answer 2

Explain yourself...The Inquisition was in progress, among others.