US spy activity in EU jeopardising trade talks

An escalating transatlantic row over American spying in Europe has thrown doubt over trade talks and data-sharing arrangements between the European Union and US.

German claims that the US had bugged Angela Merkel’s phone prompted a storm of protest from the chancellor and other European leaders, Taoiseach Enda Kenny among them.

Dr Merkel phoned President Barack Obama and her foreign minister summoned the US ambassador to Germany to an extraordinary meeting, the first time in living memory that such a diplomatic dressing-down has been delivered to one of Berlin's closest partners.

"I have, since we have been speaking about the NSA [National Security Agency], made it clear to the president of the United States that spying on friends is not acceptable at all," the chancellor said. "It's not just about me but about every German citizen. We need to have trust in our allies and partners and this trust must now be established once again."

Summit meeting tainted
The controversy overshadowed a summit meeting in Brussels last night at which EU leaders were due to settle on a tight timetable to resolve deep differences over the rescue of banks.

It has also reopened divisions between the EU powers over the scope of new European laws on data protection.

Intelligence officials indicated the phone in question was not Dr Merkel's encrypted official mobile phone, said to be bug-proof, but a regular Nokia mobile she used for private calls between October 2009 and July 2013. According to reports, the number linked to this phone showed up in documents leaked by NSA whistleblower Edward Snowden to Der Spiegel.

Although White House spokesman Jay Carney said Mr Obama assured the chancellor that the US "is not monitoring and will not monitor" her communications, his remarks left open the possibility this had happened in the past.

With tensions already high after claims the NSA monitored a huge volume of French phone records, Italy was drawn into the debacle yesterday with reports that sensitive communications there were monitored by the US and Britain.

Inconceivable
"It is inconceivable and unacceptable that there should be acts of espionage of this type," said Italian premier Enrico Letta.

Although Mr Kenny added his voice to condemnation of the alleged bugging of the chancellor’s phone, he suggested the allegations were not surprising: “I always operate on the basis that the calls I’m making are all listened to.”

The affair has jeopardised nascent talks on an EU-US trade deal, with Dr Merkel’s likely partners in a new coalition government complaining about a breach of trust.

"I cannot imagine to sign an EU-US free trade agreement given that basic privacy rights have been breached," said Sigmar Gabriel, leader of the Social-Democratic Party and candidate to become Dr Merkel's deputy.

European Parliament president Martin Schulz told reporters the trade talks should be suspended. "When I go into a negotiation and fear that the other side, a friendly democracy, has conducted espionage to find out what I'll say in the negotiations, then we're not at the same level anymore."

The chancellor herself said the affair may compromise existing agreements under which electronic data is shared with the US security services: "To this end, we need to ask what we need, which data security agreements we need, what transparency we need between the United States of America and Europe." Acting foreign minister Guido Westerwelle said after meeting US ambassador John B Emerson: "You don't spy on someone you trust, and when you do, it burdens the friendship."