However, more likely is that some deal would be struck (behind closed doors, of course) that would allow business to continue as usual - shutting down most if not all transatlantic commerce would be a gargantuan step for anyone to take. I don't think that would change the long term direction this issue is heading in though. We're either going to end up with court supervised limited snooping and more transparent governments or an all-pervasive surveillance state where absolutely everything is going to be hoovered up and stored for later use.
UPDATE: One of the goals of the European Union is to avoid war on the continent. With the road of economic and political integration riddled with pot-holes of various sizes perhaps the new direction to unite everybody is personal freedom - freedom of movement, freedom of speech, etc. Europe certainly has the history to justify why these are laudable goals. With partner countries such as Iceland (which has Europe's longest running parliament) showing the necessary leadership, the time has come for Old Europe to become Bold Europe.
I like that. But understanding Iceland's position is important. Iceland is due to its position, natural resources and political influence extremely free to do what it likes without threatening its diplomatic relationships.
Iceland can effectively 'show the necessary leadership' because they have little or nothing to lose, at least not as much as their European countries. In addition, Iceland has been blessed (although not currently) with a rather progressive political environment.
Other European countries are unfortunately not so lucky, and they are afraid to risk too much of it by being bold. However, if the European countries gather together to be bold, then the risk is vastly reduced.
But of course, this is one of the purposes of the EU; alone we are weak, together we are strong.
The country most likely to lead any such move would be Germany; Germans are today extremely well-inoculated against disingenuous reassurances by governments.
On the other hand, it works relatively well if you only consider going to war against each other within Europe, which definitely was the main concern in the 1950s. How peaceful this united Europe is towards other countries is another question altogether – again resorting to history does not necessarily offer hope.
[1]http://bits.blogs.nytimes.com/2013/04/23/germanys-complicate...
It's not in-your-face as a war is, but does that really matter for the people who suffer from it?