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For Obama and Merkel, spying revelations test strength of relationship built on trust
• WASHINGTON (AP) -- When President Barack Obama visited Berlin in June, German Chancellor Angela Merkel made a point of showing him a balcony in her office overlooking train tracks that crossed the border of her once-divided country -- a symbol of her upbringing on the east side of the divide, where eavesdropping by secret police was rampant during the Cold War.
• The private moment between the two leaders underscores the degree to which Merkel's personal history has influenced her outrage over revelations that the National Security Agency was monitoring her communications. The secret spying threatens to damage the close relationship between Obama and Merkel, which, until now, has been defined by candor and trust.
• "We are very sensitive to the fact that she comes from the East, and that brings with it a historical perspective on surveillance that is quite powerful," said Ben Rhodes, Obama's deputy national security adviser. He said while the White House hopes the strength of Obama's relationship with Merkel will allow them to weather the current controversy, "it also clearly makes it more difficult when she is surprised by these types of revelations."
• Reports based on leaks from former NSA systems analyst Edward Snowden suggest the U.S. has monitored the telephone communications of 35 foreign leaders. The fact that Merkel was among them has been particularly troubling to many in Europe and on Capitol Hill, given her status as a senior stateswoman, the leader of Europe's strongest economy, and a key American ally on global economics, Iranian nuclear negotiations and the Afghanistan war.
• Obama, in a phone call to Merkel last week, said the U.S. was not currently monitoring her communications and had no plans to do so in the future. But those assurances appeared to do little to placate the German leader, who said trust with the U.S. "has to be built anew" and there must be no "spying among friends."
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Questions about economy's health and budget uncertainty expected to keep Fed policy unchanged
• WASHINGTON (AP) -- Renewed questions about the economy's health and uncertainty surrounding the government's budget fight will likely lead the Federal Reserve on Wednesday to maintain the pace of the stimulus it's supplying to the econ (Continued on page 36)
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