With Germany's chancellor Angela Merkel set to arrive in Washington tomorrow, the city is already teeming with Germans. I met with a few this evening and, joking aside, a situation has developed that is looking ever more grim. The one thing on everyone's minds is Iran. Now that the country has gone ahead with its nuclear program despite the warnings of the so-called EU-3, what happens next? And not only what happens next, but what do they make of a story in the London Guardian detailing Iran's attempts to assemble a medium-range ballistic missile?

As one high-ranking German minister said, the missile would have a range of some 2,000 kilometers, capable of striking Munich. Another member of the new government said what would happen next is the EU-3 declaring their talks to have failed. Then a referral to the IAEA and on to the U.N. Security Council. And then?

This official said he is fully aware that "tough talk" would only go so far. So the next step would be sanctions, which Russia and China would probably be against. But on the off-chance they are persuaded and sanctions are applied, the oil market would be turned on its head and countries (especially in Europe) would be hit hard.
As for a military option, said the official, airstrikes are possible but we do not know where all the facilities are located. Iran would move its operations underground. An American noted that tens of thousands of Shiites would cross the border into Iraq and create further unrest. (Many were said to have crossed over to vote in the recent elections.)

As one American analyst said, "We're running out of time."