Read: Trying to kill the Iran deal could end up saving it

Whether they like it or not, the E3 will have to respond to the Trump administration’s imposition Monday of further sanctions on the Islamic Republic, including restrictions on its supreme leader, Ayatollah Ali Khamenei, and individuals close to him. Following the announcement, Steven Mnuchin, the U.S. Treasury secretary, said he also planned to designate Iranian Foreign Minister Javad Zarif, the country’s main interlocutor with the West, later this week. This not only ensures that the U.S. cuts off any avenue it has for negotiations with Tehran to ease tensions, but puts Europe’s efforts at keeping the nuclear deal alive in an ever more perilous position.(Iran, in its response Tuesday, called the sanctions “useless.”)

Europe’s warnings, public and private, about the dangers of escalation have been ignored; its decision to remain outside the new U.S. sanctions regime introduced by Trump in November has proved largely irrelevant. In the face of the continuing dominance of the U.S. financial system, underpinned by the global currency reserve, European power has melted away. The dollar remains king—and so does the U.S., regardless of the current presidential incumbent’s strained international standing.

“The U.S. position on Iran has shown that the EU’s security policy is controlled by the importance of the U.S. dollar to global trade,” Tom Tugendhat, the British member of Parliament and chair of the U.K. Parliament’s foreign-affairs committee, told me. “U.S. sanctions determine our policy, and unless there is a new global currency and banking system, it will remain so.”

This reality, acknowledged in private by European diplomats, officials, and foreign-policy advisers, has all but eliminated European leverage in the crisis so far. But it is also—now—serving to shine fresh light on the internal divisions within the EU over its foreign policy and aspirations as it looks to its future following Britain’s 2016 vote to leave the bloc. The mounting crisis over Iran has revealed the fundamental tension at the heart of the EU and its vision for its future role in the world: Does it want to be a global power or not?

Read: In Europe, standing up to America is now patriotic

To rival U.S. economic power, Europe may need a rival currency—and a single monetary policy. But to develop such an alternative, the euro needs the kind of radical reform fiercely opposed in Berlin. Germany fears taking on the responsibility of the bloc’s debts, because of the varying economic strengths of the EU’s 19 members that use the currency. Berlin also is concerned that a true rival to the U.S. dollar would increase the euro’s value, hitting its own highly successful export-driven economic model. And to even begin to rival U.S. military power, Europe would need yet more radical reform of its structures and aspirations—a step just as controversial, particularly in Berlin.