A recent German opinion piece compares the 1970s terrorism of the Baader Meinhof gang with the current wave of Muslim terrorism. Its verdict is simple: governments primarily protect themselves. When communist terrorists targeted the elites, the German government did anything that could be done within the confines of the rule of law to hit back. They amended the penal code to criminalise membership in terrorist organisations and they understood that the danger of terrorism is linked to its existence in an ideologically sympathetic social environment, so they imposed additional restrictions on the radical left in general.
When it comes to Islamic terrorism, the situation is different: now the common public is the target. Governments react, by playing down the danger and avoiding conflict with the ideologically sympathetic environment in which terrorism thrives. Instead, terrorist outrages, and the fear they instill, are used to grant additional powers to government and to impose additional restrictions on the public at large.
A similar analysis could be applied to other European countries. The terrorism of the red brigades, the IRA etc. threatened the elites at least some of the time. Governments responded accordingly. Islamic terrorism is mainly seen as an opportunity to expand executive power and remove checks and balances without ever confronting the core problem: Islam. The relationship between the two is therefore almost symbiotic.
After the recent London attacks, the British Prime Minister seemed genuinely shaken though: now, the terrorists were getting too close for comfort.