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A truck carries the bus damaged by the suicide bomb blast which targeted a group of Israeli tourists at the airport in Bourgas, Bulgaria, on July 19, 2012. (Nikolay Doychinov/AFP/GettyImages)

When Iranian Foreign Minister Ali Akbar Salehi visited Vienna in February for a U.N. Alliance of Civilizations conference, he was met outside by a protest. Spearheaded by a 38-year-old Austrian political activist named Simone Dinah Hartmann, the group, called Stop the Bomb, is made up of a broad cross-section of the Austrian political spectrum, from leftists and Greens to conservatives and Iranian dissidents. The group is small, and yet it managed to elicit a reaction—from Salehi himself. When a journalist asked Salehi about Stop the Bomb’s demands that Austria break off all relations with Iran, the foreign minister warned that “caution and wisdom should prevail. Otherwise one could end up in problem situations.” Salehi then added that Austrian anti-regime activists, including Iranian dissidents living in the country, should “be more rational and more careful.”

Then things got worse: In the face of this barely veiled threat, the Austrian foreign minister, Michael Spindelegger —who met Salehi—refused to rebuke the Iranian diplomat, or even publicly acknowledge that a high-level official of a foreign government had stepped on Austrian soil and attempted to intimidate its citizens.

The Vienna government’s cowardice and cravenness points to something rotten about Austria—but also, more ominously, about Europe, which has emerged as the weak link in the West’s standoff with the Islamic Republic and its allies. “Europe believes that if you’re nice to the mullahs, they’ll be nice back,” Hartmann told me recently. But the truth is precisely the opposite.

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Last month, on the 75th anniversary of the Anschluss, 40 percent of Austrians said that things under Hitler weren’t all bad. One can bat away this fact as irrelevant to Austria’s current policies and postures, but it is decidedly not: If the Führer looks pretty good in the rear-view mirror then the Islamic Republic is certainly acceptable.

In 1984, Austria’s was the first foreign minister to visit Iran after the Islamic revolution, and in 1991 then-President Kurt Waldheim was the first Western leader to make the trip. Waldheim was greeted by then-President Ali Akbar Hashemi Rafsanjani, who praised the former Nazi officer for his “anti-Americanism” and “anti-Zionism.” Since then, Austria and Iran have done a lot of business together.

Hartmann’s Stop the Bomb has focused on this aspect of the bilateral relationship. “We went after Austrian businesses doing deals with Iran,” says Hartmann. Most notably, there was a 2007 memorandum of understanding between the Austrian Oil Management Company (OMV), central Europe’s largest energy company, 30 percent of which is owned by the state of Austria, and Iran that represented a 22 billion Euro investment in developing Iranian natural gas. “For us,” the president of Iran’s chamber of commerce has noted, “Austria is the gateway to the European Union.”

“We bought a share in OMV,” said Hartmann, “and at the shareholders’ meeting I stood up to argue against the deal. People were booing me,” Hartmann recalled. “That’s Austria.”

In 2009 OMV withdrew from the agreement, perhaps, as Hartmann says, under international pressure from the United States, as well as domestic pressure that included a petition signed by three former Nobel laureates, including Elie Wiesel. More likely, however, it was the Green revolution of 2009 that compelled OMV to back off. The political instability that OMV feared could make exploration difficult might also have cost the energy giant their investment, had a regime unhappy with their dealings with the Islamic Republic come to power.

Nonetheless, Austrian industry has hardly changed its spots. Publicly, where Austria once opposed sanctions, says Hartmann, it now claims it will follow the European majority regarding sanctions. But behind the scenes something else entirely is going on. “Austria is lax in maintaining and enforcing sanctions,” she explains. “We’ve smuggled people into chamber of commerce meetings where they tell businesses how to get around sanctions.”

And that’s only one of the problems with relying too much on sanctions to bring the Iranians to heel. If the combined U.S. and EU sanctions regime has any chance of stopping Iran’s march toward a nuclear weapons program, all of Europe needs to be on board, against both Iran and its allies like Hezbollah. It’s true that the EU may now—nearly 20 years after the United States—move to designate Hezbollah a terrorist organization. If it does, that’s largely on account of last July’s suicide bombing in Bulgaria that killed five Israelis and a Bulgarian bus driver. But even if the EU does designate Hezbollah, it would only affect the group’s “armed wing,” leaving its so-called “political wing” free to continue raising funds in Europe.

Given Europe’s track record, the Islamic Republic knows that it takes very little to scare off EU officials. In the 1980s and ’90s the Iranians and their Lebanese arm, Hezbollah, waged a bloody war on the continent, targeting mostly Iranian dissidents but with little concern if Europeans were killed as well. Among the more notable Iranian campaigns on the continent was the 1985-1986 wave of bombings in Paris that killed 13 and injured more than 200. In Vienna in 1989, the Iranians killed a Kurdish leader and two of his associates. Perhaps it is because the Austrian authorities allowed the suspects in the 1989 murders to escape that the Iranians felt no compunction about gunning down another four Kurdish dissidents in Berlin in 1992.

Western policymakers are worried that an American or Israeli attack on Iran’s nuclear program may result in a campaign of Iranian terror, but the fact is that the Islamic Republic has never stopped its terrorist operations, including those in Europe. In addition to the Hezbollah attack in Bulgaria that killed six in the resort town of Burgas, there was another plot in the summer of 2012 in Cyprus, where another Hezbollah operative scouted potential Israeli targets.

While Jerusalem and Washington have used the Cyprus and Bulgaria cases to press the EU to designate Hezbollah a terrorist organization, France and Germany led the counter campaign to keep the party of God off the terror list. Paris and Berlin bizarrely reason that listing Hezbollah—and thereby preventing it from raising funds in Europe—will destabilize Lebanon, even though it’s obvious that it is the mere existence of Iran’s asset in the eastern Mediterranean that destabilizes Lebanon. What France and Germany really mean is that designating Hezbollah and pushing back against Iran may once again subject them to a campaign of terror that they’ve been through once before.

As German journalist Sylke Tempel memorably put it in the wake of the Bulgarian report naming Hezbollah responsible for the Burgas attack, “There’s the overall fear if we’re too noisy about this, it might not be Israeli tourists this time.” In other words, Iran and Hezbollah might target those whom Europeans really care about—not just Israelis and a Muslim bus driver, but Europeans. Still, as Austria’s failure to rally behind Hartmann shows, the Europeans seem to think the best way to protect their own is simply to shut up.

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