The self-interest is political more than economic
Yes, Old Europe stands to get cut out of the arms and oil deals they've had with Iraq. That's the price they'll likely pay for what they're doing. At the same time, the German leaders won reelection by pandering and feeding on anti-Americanism. To a politician, there is no self-interest higher than holding on to power.
As I mentioned yesterday, if NATO as we know it is dead a year or two from now, you'll be able to trace it back to Belgium's veto yesterday. Such blatant political pandering will have a high price.