German Spy Accused of Working for U.S.

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July 7 (Bloomberg) -- 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. Hans Nichols reports on “In The Loop.” (Source: Bloomberg)

Allegations he german intelligence officer spied for the united states.

Just one indication of the level of distrust between berlin over washington's intentions.

Hans nichols joins us now.

Seems like there is a leaning to the worst intentions by the germans.

That is one way to put it.

This puts angela merkel in a difficult spot.

She's in china now.

She's flying back.

To give you a sense of how serious the allegations are, she rarely comments on issues abroad.

She commented this morning.

There is someone working for the federal security sources in germany, that they were a double agent and also working for the nsa.

Two favorite parts of the story.

How they found him was he offered his services to the russians, and that is how they found him.

The other way?

The way he was transmitting data back to the states, although allegedly, through a fake weather app on his computer.

I will check to see whether yours are real.

You are welcome to check.

Now that she has said this, and she said this in a very unusual way, what is the next step?

Clarity for starters.

They need to know exactly what happened.

Was this actual classified data transmitted?

The bigger issue is will this get too far in front of animal -- angela merkel?

Will she have to summon outrage again?

When her phone was tapped a year ago, merkel was slow to express outrage.

That came back and hit her -- bi t her.

Look to see how strongly she expresses outrage and what this does to talks.

I know we talk a lot about trade.

This is a serious issue that could put the free-trade pact on ice.

Hans nichols, our international correspondent.

There are no world cup game today's. that does not mean soccer fever has died down.

They will battle it out this week for the final two spots in the tournament which leaves fans and bookies wondering how much the rankings mean, where is the

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