There must be over 100,000 Europeans who have US citizenship but don't know it. Due to a threat from the US, European banks may now freeze their accounts.

I think it is entirely reasonable for the US to demand its citizens pay taxes on large foreign income. (ISTR that there is already an exemption for up to a certain amount.) However, The US should revise the FATCA law so that the tax applies only to FATCAts, and only to people who have acknowledged US citizenship in some way since attaining adulthood.

The EU should do more than just beg the US to back off. It should protect its citizens by setting up alternative banks which do no business in the US, and legislating that banks which close accounts under threat from FATCA must move the accounts to the alternative banks rather than freeze them.