Euro standards are backwards; they have stricter CO2 emissions regulations, but are lax on NOx. I'd imagine they don't have a lot of smog events like what happened in California during the 60s and 70s.
Of course, the optimal situation would be to tightly regulate both pollutants.
The amount of extra CO2 from a car running a better NoX system is utterly irrelevant compared to how much CO2 is emitted.
Trading CO2 for NoX is completely indefensible. NoX is really really bad for the environment.
This is actually an area where TTIP might improve things a lot by aligning different emission standards.
In Europe, people don't commute as much, and as long hours, in cars, so I would guess NOx levels in city air don't get as high as in the US cities. So maybe there is no need to have as strict NOx emission limits for cars in Europe.