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doug saunders

On Thursday, Germany took the unprecedented move of expelling the CIA station chief (a U.S. embassy official official who remains unnamed) from the country. While the exposure or expulsion of the local CIA boss is a commonplace move in places like Russia and Pakistan, it is really unprecedented from a firm ally like Germany – a NATO partner that has numerous intelligence sharing relationships with Washington.

But the Americans have made the Germans really, really angry. Edward Snowden's National Security Agency leaks had already revealed that the agency was regularly gathering information from phones and Internet connections in Germany – including bugging the cellphone of Chancellor Angela Merkel, a move that president Barack Obama had to phone her and apologize for.

This week the apologies and recriminations mounted even further – including another cringeworthy phone call from Mr. Obama – after it turned out that the CIA in Berlin had paid an employee of the German intelligence agency €25,000 ($36,000) for 218 classified documents on a USB stick. Some reports suggested that these documents included information about Germany's investigation into the Snowden affair.

This latest incident, and the responses in Berlin and Washington, tell us a few things:

1. Barack Obama isn't able to rein in the CIA. This affair made it even more clear that Mr. Obama is not completely in charge of his intelligence agencies. That became painfully evident on July 7, when Mr. Obama spoke to Ms. Merkel on the phone and, according to the White House, discussed Ukraine and other international matters but not the arrest, the previous day, of the German CIA spy – because, according to some reports, Mr. Obama had no idea it had occurred as he was "was kept in the dark" about it by the CIA, which didn't bother to brief the White House.

Even worse, Mr. Obama had promised, when news of the bugging of Ms. Merkel's cellphone broke last summer, to put an end to this sort of spying on NATO allies. "I'm the end user of this kind of intelligence," Mr. Obama said at the time. "If I want to know what Chancellor Merkel is thinking, I will call Chancellor Merkel." There was talk of a complete review of U.S. spying operations. But it is now apparent that this review never really happened, and Mr. Obama was either unwilling or, it is likely, unable to bring about a change in intelligence behaviour.

2. Germany and the United States aren't on the same page. The two countries have presumably been spying on one another for years, if not decades – it's what major countries do. And there have probably been behind-the-scenes recriminations over it in the past. But they have generally been dealt with behind the scenes – in good part because the U.S. and Germany need each other's intelligence co-operation more than they need a public feud.

But by making this a public issue, Ms. Merkel is sending a signal that she is no longer interested in co-operating with the United States around intelligence.

That's big shift. After the cellphone-bugging revelations broke, Germans signalled that they might want to enter a "no-spy" agreement with the United States similar to the "Five Eyes" treaty that links Canada, Britain, Australia, New Zealand and the United States in a network of mutual intelligence-sharing. Under "Five Eyes," in exchange for a broad pledge not to spy upon one another, the five mainly English-speaking countries agree to share bulk collection of intelligence data. It means that Canada, for example, will monitor all international telephone and Internet traffic going through its borders and pass it along to Washington.

As The New York Times reports, Germany's desire to join this club soon faded:

"The way German officials tell the story, they were promised those negotiations by Susan E. Rice, Mr. Obama's national security adviser, and other American intelligence officials. But the American officials say there was never such a promise, and that German officials blanched when they heard what kind of responsibilities they would have for intelligence collection and cyberoperations around the world if they ever joined that elite club.

The discussions went nowhere, and the public collapse of the talks left Ms. Merkel's top aides embittered. Politicians, including Ms. Merkel, began talking about creating a "Germany only" segment of the Internet, to keep German emails and web searches from going across American-owned wires and networks."

3. Germany will play the anti-American card again. Ms. Merkel's predecessor, Social Democratic chancellor Gerhard Schroeder, built much of his widespread public support on popular anti-American sentiments, breaking decades of postwar co-operation with speeches harshly critical of the United States. That shift wasn't so difficult when George W. Bush was in power and the Iraq war, highly unpopular in Germany, was taking place. Mr. Schroeder moved relations closer to Moscow and further from Washington.

Ms. Merkel, in contrast, has gone to great lengths to be seen as a pro-American Chancellor, and her relations with Mr. Obama during her first term were very cordial. Even after the Snowden revelations broke, Ms. Merkel ran a parliamentary election campaign largely devoid of anti-American rhetoric.

But that appears likely to change – in large part because German voters have been turned off the United States by this scandal. A poll published this week by the magazine Der Spiegel revealed that 69 per cent of Germans say their "trust in the alliance with America has declined." Ms. Merkel's Christian Democrats are likely to realize that their pro-American stance is becoming a liability.

4. The United States has shot itself in the foot. The U.S. is seeking a lot from Germany these days: It is in continuing discussions over NATO's role in the Ukraine (a subject of deep disagreement between the two countries), debates over sanctions against Russia and discussions toward a U.S-European Union free-trade agreement, similar to Canada's recently-negotiated deal.

As Mr. Obama must realize, this is a terrible time for relations between the countries to fall apart over spying. Germany's traditional role as a bridge between Eastern Europe and the West makes it an indispensable partner – and a breakdown of that relationship could only be good for Russia.

"This spying scandal plays into the hands of Vladimir Putin, the Russian president," writes Judy Dempsey of the Carnegie Endowment for International Peace. "Given the Ukraine crisis, it is very much in Putin's interest to see the West divided and weakened – preferably to the extent to which Europeans and Americans will be unable to agree on economic sanctions against Russia."

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