OVER THE past 25 years, European and American perspectives toward the Islamic Republic of Iran have sometimes converged and sometimes diverged. Initially, Europeans, like Americans, were concerned that Iran would try to export its revolution throughout the Islamic world. France was the target of a vicious Hizballah attack against its peacekeeping forces in Lebanon in 1983, and later of Iranian-sponsored bombings in Paris. The United Kingdom was the victim of Iranian wrath during the Salman Rushdie affair. And many Europeans became hostages of Iranian-sponsored groups in Lebanon. This led the Europeans, in tune with Washington, to support Iraq in various ways during the 1980-88 war with Iran. Notably, the Europeans terminated all assistance to Iran's nuclear program; France and Iran embarked on a bitter legal feud about the shah's $1 billion loan to Paris for a 10 percent share in the EURODIF uranium enrichment consortium, while Germany refused to continue working on the Bushehr power plant (leaving Russia to pick up the pieces).

In the 1990s the European position diverged from that of the United States. While the United States tightened sanctions (in the form of the Iran-Libya Sanctions Act), the EU initiated a policy of engagement with Iran in the hope of using trade as leverage for concessions on human rights and terrorism. A "critical dialogue" was initiated in 1992, upgraded to a "comprehensive dialogue" in 1998 after Muhammad Khatami's election as president. The dialogue was accompanied by significant investments by major European companies. The European Union became Iran's largest trading partner, with European trade constituting 35 percent of Iranian imports in 2004. And while Europeans were clearly aware of Iran's nuclear ambitions, they did not consider it to be a significant problem. I remember European diplomats stating in 2000 that Iran was on track to becoming a democracy and that as a democracy it would give up its nuclear intentions, so American worries were unjustified. So what has changed since then?

The European Wager onIran

TWO THINGS happened in 2003 that profoundly altered European attitudes. First, the evidence that Iran was indeed pursing a nuclear weapons program, already substantial since the revelations made in the summer of 2002, became overwhelming. The work of European intelligence agencies in this regard concurred with the June 2003 IAEA report to its Board of Governors, as much a smoking gun as the agency had ever produced about the country.

The second was the impact of the Iraq War. Despite the heated rhetoric of French and German officials in opposition to the war, political establishments on both sides of the Rhine were concerned about the long-term consequences of the Iraq crisis for the transatlantic relationship. At the same time, Paris and Berlin were keen to show Washington that proliferation issues could be tackled by negotiation rather than by coercion. For its part, the United Kingdom, engaged as it was alongside the United States in Iraq, was keen to demonstrate its credentials as a key European partner on a significant security problem. Moreover, the personal stance of some key individuals, such as Germany's then-Foreign Minister Joschka Fischer, who had from day one advocated a tougher line toward Iran, helped change attitudes. All of this helped crystallize a European initiative designed to convince Iran to abandon its nuclear weapons ambitions--initially a trilateral British-French-German one, to which the EU was later included.

The EU-3 offered a clear bargain. They were ready to normalize trade relations and offer additional compensations, such as the construction of a light-water reactor and assurances for the provision of nuclear fuels. In return, Iran would renounce any enrichment and reprocessing capabilities and not build its heavy-water reactor. The European wager was as follows: "We are trying to induce the Iranians into making a rational choice. This choice is between engagement in the international community, including a full political and economic relationship with the EU, and isolation and perhaps sanctions if Iran refuses to give up key nuclear installations." The wager rested on the assumption that the Iranians were in desperate need of political recognition and foreign investment, and would end up making what appeared to be the reasonable choice. Implicit in Europe's approach was the message that if it failed to grasp the opportunity, Iran would be left in the hands of the bad cop--the United States. At worst, the Europeans wanted to slow down Tehran's nuclear program, hoping that the regime would eventually evolve in a positive direction. At a minimum, the suspension would affect Iranian nuclear expertise and know-how.

However, the Iranians had made it clear on several occasions that they intended to resume their nuclear activities and would not renounce their alleged right to the whole fuel cycle. By the spring of 2005, the negotiations were leading nowhere. The last hope was pinned on a victory for Hashemi Rafsanjani in the June presidential elections, on the assumption that he would be a strong leader with enough legitimacy in the Iranian system to impose a negotiated settlement of the issue. This was Plan A--and, as was the case for supporters of the European draft constitution, there was no Plan B. The election of Mahmoud Ahmadinejad dashed these hopes, but it was only the final nail on the coffin.

Why Europeans Care

AMERICANS SOMETIMES question whether the Europeans really are that concerned about the Iranian nuclear question. We are.

First, Iran is a potential military threat. The European Union's territory is not yet within the range of existing Iranian missiles, but the evolution of the Shahab program makes it likely that it will be in a few years. Turkey, a key NATO ally and a candidate for EU membership, already is. This is also true of several countries of the region with which France and the United Kingdom have security commitments and defense relationships.

Second, the Europeans believe that the future of non-proliferation is at stake. A nuclear Iran would mean the end of the Nuclear Non-Proliferation Treaty (NPT). After the declared North Korean withdrawal, a second one would be the proverbial straw that broke the camel's back. If Iran were to withdraw from the NPT, the treaty and perhaps the whole nuclear non-proliferation regime would unravel. Moreover, the prospect of additional nuclear powers in the Middle East, a volatile region that is also in Europe's immediate neighborhood, is considered a scary one--especially for those Europeans who profess to care about "stability."

Finally, the credibility of the European Defense and Security Policy, and of the "effective multilateralism" that the EU claims to promote, is also at stake. What the Europeans are trying to demonstrate is "the power of soft power", or their ability to solve a proliferation crisis by using, essentially, the economic might of the European Union.

Limited Transatlantic Divergences

THE GOOD news about Iran is that the issue has failed so far to produce the kind of transatlantic rift that we saw in the run-up to the Iraq War. There are many reasons for that. First, the threat this time is real and undisputed, and there is no transatlantic disagreement here. As early as May 2003, a French report for the Nuclear Suppliers Group stated that "the official civilian nuclear program is likely to hide a military program." If anything, European assessments are even more pessimistic than American ones. The 2005 U.S. National Intelligence Estimate on Iran reportedly suggested that Tehran's program would not come to fruition for another five to ten years, but many Europeans believe this time frame is too conservative.

Second, memories of the Iraq War controversy are still fresh, and administrations on both sides of the Atlantic have been careful not to ratchet up the rhetoric when occasional disagreements have occurred--especially because dividing Europe and the United States has been central to the Iranian strategy. The Europeans have welcomed Washington's positive attitude since early 2005. Under Secretary of State Condoleezza Rice's stewardship, the United States has stated that it could consider giving economic benefits to Tehran (such as entry into the WTO and sales of spare aircraft parts) as part of an overall package, and the administration's rhetoric on Iran has been very moderate. At the same time, in part because of the Iraq War, the Europeans are not worried about Washington being gung-ho about the use of military force. Gone are the days of "real men go to Tehran" bombast.

Finally, the radicalization of Iranian policies has helped cement the transatlantic consensus on the need to stop the Iranian program. This was the (thin) silver lining in the election of Ahmadinejad.

What about Iranian-European economic ties, though, since European countries and companies have significant economic interests involved? This has not been a critical factor. As one of the Middle East's main producers of oil and gas, Iran cannot be neglected; it is also a promising market. However, this has not softened the position of the EU-3 or the EU as a whole on the nuclear issue. The reasons are simple. First, economically speaking, Iran represents only 1.23 percent of EU imports. Second, most European firms who have invested or expect to invest in Iran consider the United States much more important for them. Thus, there has not been any real pressure from the private sector for a softer line on Iran.

There is, however, one significant difference between the European and the American approach. For Washington, the central issue is the Iranian regime. But for the Europeans, the central issue is the nuclear non-proliferation regime. Europeans do care about human rights violations in Iran (many European parliamentarians are keen to denounce Iran's record in this regard), but they do not make them a central foreign policy issue. And concern about Iranian-sponsored terrorism is today more important in the United States than in most European countries (with the possible exception of the United Kingdom, because of its strong military presence in Iraq). In a strange reversal of the usual transatlantic debates on proliferation, Europeans seem to care more about capabilities than intentions when it comes to Iran. This difference of perspective would lead to a serious disagreement in the hypothetical case where the regime was to evolve in a positive way but still continue down the nuclear road: a democratic nuclear Iran would be much less of a problem in American eyes, but almost as much of a problem in European eyes.

Transatlantic consensus on limited sanctions will be easy to achieve--even in the absence of a UN Security Council resolution. According to a poll conducted by the German Marshall Fund in June, economic sanctions are the preferred option for almost as many Europeans (18 percent) as Americans (24 percent). Sanctions that affect the oil and gas markets will be trickier to agree upon, but the EU-3 appears at least ready to move in this direction. The hard transatlantic discussions will come if it appears that sanctions are not efficient. But there will be no Franco-German led "axis of weasels" this time. The UK government appears uncomfortable with discussing the possibility of military action; Jack Straw's frequent insistence on the absence of military options is indicative of the heavy burden of the Iraq War on the Labour Party. Meanwhile, the French have consistently refused to exclude it. (Jacques Chirac's January 19 speech on nuclear deterrence was not caused by the crisis, but he does see Iran as a serious threat.) Likewise, the new German government of Angela Merkel has chosen a harder line than its predecessor.

This is not to say that as the crisis escalates, transatlantic solidarity will be assured at all times. In June there was three times less support in the European public for military action against Iran (5 percent) than in the American public (15 percent). If dissuasion does not work, most Europeans will choose containment and deterrence over rollback through direct military action. But support for a hard line against Tehran is likely to grow as Iranian rhetoric escalates and its program accelerates, making a repeat of the transatlantic controversy of 2002-03 highly unlikely.

Bruno Tertrais is a senior research fellow at the Paris-based Fondation pour la Recherche Stratégique. His latest book is War Without End (2005).