While the March 11, 2004 terror bombing in Madrid was thought to have been a victory for the Islamic terrorists, it was actually a major defeat. Up to that point, Europe was not going all out to shut down Islamic terrorist activity in its midst. For decades, European governments had an "understanding" with terrorists. Put simply, terrorist groups could use Europe as a safe house, as long as they committed no terrorist acts in Europe, and pretended that they weren't terrorists. This policy was very unpopular with those countries getting hammered by terrorists. They saw terrorist leaders, fund raisers, publicists and recuperating operatives, safely stashed in Europe. It was a pretty good deal, as the Europeans simply declared the terrorists as "political asylum seekers," and no one could touch them.
All that changed after March 11, 2004. While Europe had arrested over 500 terrorist suspects in the three years after September 11, 2001, they simply got the ones who were too dumb to keep their heads down. Until 2004, many European nations denied that they had a problem with Islamic radicals and terrorists. While police and intelligence commanders were aware of problems with many of the twenty million Moslems living in Europe, the politicians didn't want to hear of it. Not politically correct, especially since it was not popular to discuss how most Europeans made no secret of how much they despised the Moslems in their midst. Many Moslems responded by approving of the damage done by Islamic terrorists.
By late 2004, European nations had agreed on new measures to deal with the growing Islamic terrorist threat. Well, at least the police agencies and intelligence services had improved communication and coordination. The politicians, and the public, were still more eager for the problem to somehow just go away. But the July, 2005 bombings in London, blew away the apathy once more. Now there are efforts to better keep track of who enters and leaves the European Union nations. The police have pointed out that people smugglers had been caught moving known terrorists as well. So border security, including training standards, is being standardized. There has been more cooperation in cracking down on terrorist fund raising (among Europe's Moslems), and using and moving this money to support terrorism.
But the national intelligence services still hold back when it comes time to share information. No one wants to risk exposing, and losing, secret sources. This is particularly the case with agents within Islamic radical organizations. These people are hard to find, develop, and keep on the job. So, as a whole, the Europeans know a lot about Islamic terrorism in their midst, but unless a bomb goes off, they hold back sharing information with each other. As a result, some of the Islamic terrorists have found that they can escape capture, or even observation, by constantly moving from one European country to another.
It's politically correct to blame it all on the Americans, while ignoring all the casual support Europe gave Islamic militants over the last few decades. Compared to Americans, Europeans are much more cautious. They'd prefer to handle the current outburst of Islamic terrorism as a police matter, which was how they handled the leftist (largely homegrown) terrorists of the 1960s, and the first wave of Arab (political, not so much religious) terrorists of the 1970s and 80s. Europeans consider themselves more patient than Americans. While Europeans consider invading Iraq a bit much, they are right with the Americans when it comes to fighting terrorists at home. Most Europeans know that they have harbored, and nurtured, Islamic terrorists for years. But by breaking the "understanding" in March, 2004, the Islamic terrorists have sacrificed one of their few secure base areas. That was a major defeat.