European leaders, having preferred not to talk much about Iraq since the U.S.-led invasion in 2003, seem fascinated by it once more. As Iraq recovers from civil war it is beginning to look like a good place to make money. It also offers an opportunity for EU security cooperation, especially for those governments that are unwilling to send more troops to Afghanistan. The Iraq issue almost derailed the European Security and Defense Policy (ESDP), but now it presents a chance to show how far the EU has come in learning how to stabilize war-damaged states.

Even two years ago, when the insurgency was still in full swing, it would have seemed foolhardy to predict that Iraqi trade might soon capture top-level attention in Europe. Yet early 2009 saw France's president Nicolas Sarkozy, Germany's foreign minister Frank-Walter Steinmeier and the UK's business minister Peter Mandelson all leading trade delegations to Baghdad.

Iraq has hard cash - saved when oil prices were high - but its infrastructure needs an overhaul. Lord Mandelson was accompanied by representatives of more than 20 British construction companies, while President Sarkozy promised there will be "no limits" to French involvement in Iraq's reconstruction.

The potential rewards are huge; last December, Iraq's government signed a €1.5bn deal with Germany's Siemens for gas turbines. Baghdad has also offered to supply up to half the gas for the new Nabucco pipeline that is meant to reduce Europe's reliance on Russian energy supplies.

But the risks remain very significant too. Iraq may have grown safer, but its stability is far from assured. With the U.S. poised to draw down its forces - and Iraq's own army and police still far from consistently reliable - the country faces continued uncertainty. In Washington, many Middle East experts fear the consequences of Iraq being forgotten, overshadowed by Afghanistan and Pakistan.

If European governments want to develop trade with Iraq, they need to contribute to the country's security - or their investments may go to waste. A relapse into violence would be very damaging to the EU in other ways, destabilizing its relations with Turkey, weakening its diplomacy with Iran and even endangering its policy towards Palestine.

European governments are not unaware of these dangers. This year, Germany set aside €150m for support to Iraq. Yet the last thing the Baghdad government needs is a slew of well-intentioned but poorly-coordinated security initiatives from the West.

The ill effects of under-coordinated aid have already been demonstrated in Afghanistan after the initial defeat of the Taliban. Individual European states adopted specific projects - Germany took on the police, Italy handled the judiciary, Britain attempted to get a grip on drugs - and the result was an unproductive mess.

Something similar has since happened in Iraq, although on a smaller scale. Italy is offering in-country police training, while Germany also offers training, but in Jordan and the Gulf. There has also been a (predictable) gap between support from those countries that backed the U.S. in 2003 and those that refused to do so, reducing the options for EU coordination.

Future European aid to Iraq needs to be applied more strategically.

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Daniel Korski is a Senior Policy Fellow at the European Council on Foreign Relations and a Special Adviser to the US Project on National Security Reform.

Richard Gowan is Associate Director of Policy at the NYU Center on International Cooperation and UN Policy Fellow at the European Council on Foreign Relations.