What are our dear leaders of the EU thinking?!

Here is FFII's letter to the MEP's about the Data retention directive that might become law in EU.

I simply don't get it - why is our dear leaders pushing through with a law that most likely will do absolutely nothing to prevent terror? Instead it will cost enormous amounts of money and who's going to pay for that? Everyone of course, since there's no one else to pay.

Can someone explain to me the reasons why anyone would want to push for such a law? Who wins, besides the terrorists which must be laughing long and hard at this directive since besides being the wrong solution, it also contains huge holes they can easily use to avoid any detection.