Re: Will the German government be sensible?
My understanding is, if Microsoft lose and Microsoft US has to hand over the data, which "belongs" to Microsoft Ireland, as it is on Irish soil in a data center owned by MS Ireland, as far as I am aware, then the executives in Ireland will be liable to prosecution under EU data protection laws.
MS will have handed over the data to a third party outside the EU, without a valid EU warrant and wihtout getting written permission from the account holder and anybody identifiable in his correspondence. The account holder could also find himself facing prosecution in the EU for "allowing" MS to hand the data over - although that will probably be the least of his worries then...