Maybe if Muslim countries were a bit more understanding of other beliefs
That's the problem right there. Islam is a supremacist religion and teaches that followers of other religions are inferior persons. In Sharia law it is a far greater sin to harm a Muslim than a Kaffir. (non-Muslim)
In strict Muslim regimes, it's forbidden to practice another religion in public lest it undermine the faith of the true believers. Brunei takes this to the ultimate with a ban on Christmas celebrations, including sending Christmas cards, wearing Santa hats or putting up a Christmas tree or other decorations, with a five year jail term for offenders.
If anyone is worried about respecting other cultures and religions, and wants to promote diversity, then fair enough, it's a noble goal. But why on earth would you start with the EU? It's a model beacon of tolerance and diversity compared to virtually anywhere else.
and encouraged the majority to be a bit more inclusive and the world would be a better place.
Kumbaya, my Lord, Kumbaya
Who is suggesting that be banned?
Where is anything being banned?
The EU guidelines for staff, in reality instructions, are clear that the word "Christmas" is not to be used in the workplace. Unless used alongside clumsy circumlocutions such as "...for those celebrating Christmas, Hannukah..." etc. That can only be read as banning the use of a stand-alone "Happy Christmas" as a greeting by officials in the EU workplace. Even if they're only a reciprocal greeting when someone wishes them a happy Christmas. Which, when you think about it, is quite insulting to the other person.
Do you think that's a good thing?