A report posted by Chancellor Merkel’s office on the occasion of U.S. Secretary of State John Kerry’s visit to Berlin in late January stressed that the transatlantic partnership with the United States is one of the most important pillars of German foreign and security policy, along with European integration. The report described the United States as “Germany’s closest ally outside of Europe.” The talks between Merkel and Kerry addressed important international issues such as the conflicts in Afghanistan and Syria, Iran’s nuclear program, and the deteriorating situation in Ukraine, as well as significant challenges to the bilateral relationship posed by negotiations for a Transatlantic Trade and Investment Partnership (TTIP) and revelations about NSA surveillance activities in Germany. 
In the new government’s declaration to the Bundestag 29 January, Chancellor Merkel devoted most of her comments on U.S.-German relations (11 of 13 paragraphs) to the strains resulting from revelations about NSA surveillance activities and the subsequent inability to reach a bilateral understanding on the way forward. Merkel said the revelations reveal a sharp difference of opinion in the two countries over the proper balance between personal privacy and national security but stressed the most serious aspect of the issue is that it undermines trust that forms the foundation for cooperative relations among allies. She acknowledged the possibility that U.S. and German differences on this issue may be impossible to bridge but said she will continue to argue Germany’s position in discussions with Washington. 
- Merkel rejected calls from some in her government to suspend talks or cooperation in other areas—such as the SWIFT agreement giving U.S. agencies access to data on terrorist financing—in an effort to leverage concessions from Washington. 
- The Chancellor emphasized that despite conflicts, disappointments, and divergence of interests, Germany could not wish for a better partner than the United States and she insisted the transatlantic relationship would remain of paramount importance. 
Philipp Mißfelder, the CDU/CSU parliamentary group’s foreign policy spokesman, summarized the state of German-U.S. relations in an interview with the German foreign broadcast service Deutsche Welle.
“America treats us as a friend and we are still friends and nothing will change that. … The fact is: the U.S. is very helpful to us in many things, such as Germany’s domestic and international security—in the fight against terror, or in regard to cooperation in such things as international military operations. … We remain good friends and want to remain good friends. But the friendship has been damaged by the fact that the agencies have taken what they wanted without asking.” 
Transatlantic Free Trade Agreement. With negotiations for the Transatlantic Trade and Investment Partnership set to resume this spring, Berlin is concerned about flagging support for the effort on both sides of the Atlantic. The coalition agreement describes TTIP as a project of central importance for deepening transatlantic relations, and Germany—as one of the world’s leading exporters—stands to benefit greatly from reducing trade barriers. However, the EU side reportedly has been disappointed that Washington is not willing to go as far as the EU would like in reducing tariffs or in addressing the financial services sector. Moreover, many in Europe are concerned about growing public opposition based on fears the agreement will undermine European standards for safety, consumer protection, and data security. The fact that the U.S. administration has not obtained fast track trade authority from Congress also has lowered expectations for rapid progress in the negotiations. 
Stephan Wallace is a defense and security policy analyst following political, military, and economic developments in Europe. He has worked more than 33 years on this area for the U.S. government, most recently for the U.S. Department of Defense. He can be contacted by email at email@example.com. The views expressed are those of the author alone. They do not necessarily reflect the views of the American Institute for Contemporary German Studies (AICGS).
 “Merkel: Gemeinsam Lösungen finden,” Bundeskanzleramt/Bundeskanzlerin, 31 January 2014; Günter Bannas, “Kerry über die NSA-Affäre ‘Die vergangenen Monate waren rauh,’” Frankfurter Allgemeine Zeitung, 31 January 2014.
 Angela Merkel, “Regierungserklärung von Bundeskanzlerin Merkel,” Bundeskanzleramt/Bundeskanzlerin, 29 January 2014.
 Philipp Mißfelder, “No-Spy deal is no cure-all,” Deutsche Welle (interview), 15 January 2014.
 Deutschlands Zukunft gestalten – Koalitionsvertrag zwischen CDU, CSU und SPD, 18. Legislaturperiode, CDU, 27 November 2013.
 Gregor Peter Schmitz, “Freihandelsabkommen zwischen EU und USA wackelt,” Spiegel On-line, 6 March 2014; Matthew Dalton, “Europe Grumbles as Trade Talks with U.S. Falter,” Wall Street Journal, 6 March 2014.