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Merkel Says Alleged U.S. Spying Would Breach Allied Trust

Photographer: Greg Baker/AFP via Getty Images

Chancellor Angela Merkel reviews an honour guard during a welcome ceremony outside the Great Hall of the People in Beijing on July 7. Merkel is on three-day visit to China. Close

Chancellor Angela Merkel reviews an honour guard during a welcome ceremony outside the... Read More

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Photographer: Greg Baker/AFP via Getty Images

Chancellor Angela Merkel reviews an honour guard during a welcome ceremony outside the Great Hall of the People in Beijing on July 7. Merkel is on three-day visit to China.

Chancellor Angela Merkel said allegations that a member of Germany’s foreign-intelligence agency sold documents to the U.S. risk undermining trust between the two allies.

If the reports are correct it would be a “serious case,” Merkel said in her first public comments on the matter at a press briefing with Chinese Premier Li Keqiang in Beijing today.

“If the allegations are true, it would be for me a clear contradiction as to what I consider to be trusting cooperation between agencies and partners,” she said.

White House spokesman Josh Earnest responded to that comment today, telling reporters, “that’s obviously a big ‘if.’” He refused to comment on reports of the man’s arrest because of the German law enforcement investigation and because it pertains to intelligence issues.

Earnest emphasized the value the U.S. places on its “shared trust,” friendship and “shared values” with Germany. “We highly value the close working relationship we have with the Germans on a wide range of issues,” Earnest said, “but particularly on security and intelligence matters.”

The case, first reported by two German newspapers on July 4, risks adding to a U.S.-German rift over surveillance by the U.S. National Security Agency after documents leaked by former contractor Edward Snowden suggested the agency hacked Merkel’s mobile phone and spied on Germans.

Foreign Power

The office of Germany’s federal prosecutor said on July 3 that a 31-year-old German was arrested the day before on suspicion of spying for a foreign power that prosecutors declined to identify.

The man, a support technician for Germany’s BND foreign intelligence agency, met U.S. agents at least three times in Austria from 2012 to 2014 and gave them hundreds of secret documents for which he was paid 25,000 euros ($34,000), Bild reported. The documents were seized on a thumb drive and a laptop at the suspect’s home, the newspaper said July 4.

Members of Merkel’s government are demanding explanations from the U.S. in the German spy case.

“These incidents must be cleared up quickly,” Interior Minister Thomas de Maiziere, a member of Merkel’s party and her government’s top security official, said on ARD television yesterday. “Only then can we gauge the scope of the alleged espionage. I now expect a quick, unambiguous statement by the United States of America.”

China Deals

Merkel is on three-day visit to China, her seventh since she took office in 2005. She is due to speak at Tsinghua University in Beijing tomorrow.

The two sides signed several agreements today including a memorandum of understanding between Air China Ltd. and Deutsche Lufthansa AG (LHA), a deal for a new car plant in China for FAW Volkswagen Automobile Co., as well as a helicopter order with Airbus Group NV. (AIR)

China also agreed to grant Germany an 80 billion yuan ($12.9 billion) quota under its RQFII program, which allows foreign entities to invest Chinese yuan in the domestic capital markets.

In separate remarks on industrial espionage, Merkel said Germany opposes it regardless of where it comes from.

“We have a duty as the state to protect our economy,” she said. “We are for the protection of intellectual property.”

President Barack Obama’s administration has said Chinese spy agencies are involved in a far-reaching industrial espionage campaign targeting biotechnology, telecommunications, clean energy and nanotechnology industries.

Li said today that the Chinese government “resolutely opposes” hacking attacks as well as the use of the Internet to steal commercial secrets or intellectual property.

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Michael Shepard, Steven Komarow

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