U.S.-German Spy Spat Prompts Vow to ‘Work on Our Relationship’

Photographer: Thomas Koehler/Photothek via Getty Images

German Foreign Minister Frank-Walter Steinmeier, left, and U.S. Secretary of State John Kerry walk to a press conference on July 13, 2014 in Vienna, Austria. Close

German Foreign Minister Frank-Walter Steinmeier, left, and U.S. Secretary of State John... Read More

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Photographer: Thomas Koehler/Photothek via Getty Images

German Foreign Minister Frank-Walter Steinmeier, left, and U.S. Secretary of State John Kerry walk to a press conference on July 13, 2014 in Vienna, Austria.

The top U.S. and German diplomats discussed a dispute over American espionage practices in a bid to resolve their alliance’s most serious diplomatic conflict in a decade.

U.S. Secretary of State John Kerry and German Foreign Minister Frank-Walter Steinmeier met privately today for about an hour in Vienna on the sidelines of negotiations over Iran’s nuclear program.

“The German-American relationship is essential and indispensable and that goes for us both,” Steinmeier told reporters in the Austrian capital. “We’ll continue to work on our relationship on the basis of trust and mutual respect.”

Chancellor Angela Merkel renewed her objections to what she called the U.S.’s Cold War-style intelligence gathering even as she sought to prevent the dispute to get in the way of other joint projects. The U.S. and Germany have tried to find common ground over trade and Iran’s nuclear program.

“‘The relationship between the U.S. and Germany is a strategic one,’’ Kerry said in the joint statement with Steinmeier. ‘‘We have enormous political cooperation. And we are great friends.

The ministers joined counterparts from the U.K., France, and Iran in attempt to overcome a stalemate threatening their July 20 deadline for a long-term deal over the Persian Gulf country’s nuclear work.

Their talk followed the German government’s expulsion of the Central Intelligence Agency’s station chief from the American embassy in Berlin last week. That move was prompted by two additional German probes into American spying. The U.S. tried to head off the expulsion by offering an intelligence-sharing agreement resembling one available to nations known as the ‘‘Five Eyes’’ -- the U.S., U.K., Canada, Australia and New Zealand, according to a U.S. official.

Germany went forward with the expulsion anyway as authorities pursue leads to possible double agents working within the government for the U.S. The revelations have compounded anger in Germany over mass surveillance and tapping Merkel’s mobile phone.

‘‘We don’t live in the Cold War anymore, where everybody probably mistrusted everybody else,” Merkel told broadcaster ZDF yesterday. “The notion that you always have to ask yourself in close cooperation whether the one sitting across from you could be working for the others –- that’s not a basis for trust.”

Still, the German leader dismissed a suggestion that the country may scrap negotiations for the Transatlantic Trade and Investment Partnership between the European Union and the U.S.

“We have differing perceptions on the work of intelligence services, but other political areas like the free-trade agreement are absolutely in our interest,” Merkel said. “We work very close together with the Americans. I want that to continue.”

To contact the reporters on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net; Sangwon Yoon in Vienna at syoon32@bloomberg.net

To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Jonathan Tirone, Heather Langan

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