Merkel is angry, but US tap plays into German hands

"Spying between friends - that's just not done," an angry Merkel said at the start of last week's summit of European Union leaders in Brussels which was overshadowed by the issue. Instead of concentrating minds on the parlous state of the European economy, leaders were forced to consider the implications of an admission by the US National Security Agency (NSA) that it had been monitoring German and French secure communications.

"The United States and Europe are partners, but this partnership must be built on trust and respect," said Merkel on Friday. "That of course also includes the work of the respective intelligence services."

The complaint goes far beyond simply listening in to private conversations held by the German leader as well as her French counterpart Francoise Hollande and possibly other world leaders - there is a vital strategic component. Both countries are key partners in the war against terrorism and play crucial roles supporting US policies in areas vital to Washington's interests such as the US-led coalition in Afghanistan and the long-running process to curb Iran's nuclear ambitions.

According to Amnesty International, the Bundesnachrichtendienst (BND), Germany's foreign intelligence service, has been a key partner in the CIA's pursuit of suspected terrorist groups across the globe, most recently by providing evidence for drone strikes against Taliban targets in Afghanistan and Pakistan. That is by no means the extent of the BND's activities. Throughout the long-running saga to understand the extent of the advances in Iran's nuclear programme the BND was instrumental in extracting information from a computer hard drive that suggested Iran was in the final stages of designing a workable nuclear warhead. Although details are hazy, it has long been suspected the BND also co-operated with the Israeli intelligence services in disabling Iran's nuclear computer systems by the infiltration of a hostile virus.

As for the French, their Direction Générale de la Sécurité Extérieure (DGSE) and the National Agency for the Security of Information Systems (ANSSI) provided much of the crucial evidence about the use of chemical weapons in the Syrian civil war and both agencies have been at the forefront in revealing the extent of the involvement of foreign jihadist fighters in the same conflict. This allowed Hollande to take a leading role in last month's moves to generate a US-led response to the crisis by threatening air strikes against Syria. Not only was this previously unseen intelligence but much of it was shared with Washington

When the revelations of the US snooping became public last week following publication in the German news journal Der Spiegel and the French newspaper Le Monde, NSA officials attempted to play down the relevance of the issue, but by yesterday the story had gained a momentum all of its own. Instead of declining to say whether or not the incident was known to President Barack Obama those same officials were forced to admit that the president "doesn't think we are in the right place."

This was the first admission that the White House might have been privy to the eavesdropping

In the greater scheme of things the row will die down once the EU summit has ended and concessions have been made. There is also a general feeling in western security circles that no long-term practical harm has been done to the nature of the US alliance with her allies. However, there is little doubt that the revelations have damaged Obama, who has used his second term to build bridges with the Europeans - his wooing of France led to rapprochement with Hollande's predecessor Nicholas Sarkozy, and his last visit to Berlin rekindled memories of President John F Kennedy's famous "ich bin ein Berliner" speech of 1963 which cemented US friendship with post-war West Germany.

All that earlier work could be undone if the current crisis leads to mistrust created by an error that could have been quite easily avoided. In an article entitled The End of Hypocrisy, which will be published in next month's edition of the influential Foreign Affairs magazine, the US diplomatic analysts Henry Farrell and Martha Finnemore argue that the real damage has been done not by the revelation of the snooping but by the insinuation that the action was part of an official policy operated by NSA.

"When these deeds turn out to clash with the government's public rhetoric, as they so often do, it becomes harder for US allies to overlook Washington's covert behaviour and easier for US adversaries to justify their own," they write. "The US government, its friends, and its foes can no longer plausibly deny the dark side of US foreign policy and will have to address it head-on."

As ever in transatlantic spats of this kind there is a sub-text which is the product of a deeper misunderstanding. In common with all of Washington's allies, the French and German intelligence services depend heavily on the sharing of sensitive information. The theory is that this should be allocated fairly and equally, especially in the war against terror, but the practice is that some allies are more equal than others and this is a source of considerable bitterness in Paris and Berlin.

The main sticking point is that neither France nor Germany belongs to the prestigious Five Eyes Club, the top-secret espionage alliance which binds the US to four other English-speaking democracies - the UK, Canada, Australia and New Zealand. The collaboration came into being during the Second World War when the Allies were attempting to crack German and Japanese naval codes and it continued into the years of the Cold War confrontation with the Soviet Union. It was supposed to avoid duplication of effort and to produce operational unity but from the outset the basic tenet was that the five club members agreed not to spy on each other. Operationally they also agreed to work side by side and to have protocols in place for information to be shared promptly and easily.

That exclusion from the club rankles and it helps to explain hints made by Merkel's officials that the UK could be drawn into the row through the activities of the GCHQ surveillance facility at Cheltenham.

The inference seems to be that the UK enjoys a privileged position through the sharing of intelligence with the US and that there is a good case for France and Germany to be included in an expanded Five Eyes Club. Tellingly, the British Prime Minister David Cameron, also attending the summit, stressed the unique nature of Britain's intelligence partnership with the US but added that he understood "what others want to do and very much supports that."

With that in mind French and German officials are pressing for talks leading to a "mutual understanding for the co-operation of intelligence agencies" and have given Washington until the end of the year to come up with a mutually acceptable response.

Unless that happens, they argue, the current lack of trust could prejudice current and future operations against terrorist groups all over the world and would mark a step backwards in the war against terror.

They also concluded that far from being a destructive move which unsettled the alliance, it simply "underlined the close relationship between Europe and the USA and the value of that partnership".

Faced by the present impasse and knowing full well that they are in the wrong, the US will respond with a diplomatic charm offensive to soothe ruffled feathers and to make the French and the Germans feel that they are still wanted. Such a move makes sense. As recent co-operation has shown, the NSA recognises that it is reliant on the work of French and German intelligence agencies, particularly in countries such as Iran and Syria where their own resources are relatively modest.

For the German chancellor that seems to be sufficient reason for a reassessment of the relationship and her message at the Brussels summit was that a new accord with Washington was long overdue, given the shared experiences the countries face in the wider world. "We are in Afghanistan together. Our soldiers experience life- threatening situations. They sometimes die in the same battles," she said.

"The friendship and partnership between the European member states, including Germany, and the United States, is not a one- way street. We depend on it. But there are good reasons that the United States also needs friends in the world."