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More Snowden revelations on spying out the Eurozone?

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Last year, when I was preparing another  analysis on the eurozone´s Herculean task of  implementing European banking union, also my friends at the Washington-based  “The International Economy” were shocked  by the spy scandal humiliating German chancellor Angela Merkel and showing Europe´s – and particularly Germany´s – mindboggling vulnerabilities. The International Economy is a  quarterly magazine founded in the 1980s  as a forum for market leaders, policymakers and global business  and financial strategists to  support closer cooperation of the G-7 leading economies.

The  revelations by Edward Snowden, the former employee and contractor  of the National  Security and Central Intelligence Agency, are moving center stage, rocking the post-war foundations of transatlantic relations.  As Merkel and other important leaders were confronted with compelling evidence that their phones and other communication devices have been tapped by U.S. intelligence agencies,  something like a Sputnik shock is seizing Europe.

Frank Schirrmacher, a publisher of the Frankfurter Allgemeine Zeitung and bestselling author, in a November 1, editorial, uses the reference of the  “Sputnik shock”  of distant Cold War days to give Americans an idea of  how Europeans are taken aback by the incomprehensive dimensions of the United States worldwide spying operations.

This explains that  I put my analysis in the International Economy´s  Fall 2013 issue – under the heading “Europe´s Sputnik” – looking especially at the impact of the U.S. driven  spy scandal on  Europe´s business and financial world.

There were important revelations from the Congressional hearings with the U.S. spy chiefs that – for example during the recent euro crisis – the U.S. government wanted to learn whether the euro area member countries would save Greece from insolvency or not. Tapping the German chancellor´s mobile telephone might have been helpful.

Among the  German business and financial community  – including among central bankers and finance officials –  suspicision  is spreading  that the elaborate spy structures at the U.S.Consulate General in Frankfurt  are  used to spy on Continental Europe´s most important  financial center. This means that also  the European Central bank and,  the German Bundesbank and Frankfurt´s  major commercial banks and  industrial companies are spy targets.  “ This raises the question whether former and present heads of the ECB or the Bundesbank –  Jean Claude Trichet  and Mario Draghi as well as  Axel Weber and Jens Weidmann  – have been  monitored by Uncle Sam in their role as key decision  makers in the euro sovereign debt and banking rescue efforts”, laments a former banking supervisor. .But this also raises another question: When further revelations will expose the way  U.S. and British spymasters  spy masters are intruding into such sensitive decision making areas like eurozone central banking, bank supervision and sovereign debt and banking rescue?

As it turned out the German Domestic Intelligence Service (Bundesamt für Verfassungsschutz) had commissioned  a helicopter mission to follow up on indications that –as the U.S. embassy close to the Brandenburg Gate in Berlin – the U.S. Consulate in Frankfurt is used as a major strategic hub for the global spy operations of American agencies such as the NSA and the CIA. The Frankfurt helicopter episode didn´t make headline news, but may have been a harbinger of possible future Snowden revelations.

As Angela Merkel  -on her two day Washington visit –  had  her first meeting with the U.S. president since  revelations that US intelligence services tapped her mobile phone, the crisis in the Ukraine  dominate the talks with both leaders keen to show that the West is ready to respond to  Russia´s imperial transgressions hitting back with staged sanctions.  But it became clear: The  Obama administration until now refuses  to allow Merkel access to her NSA file or answer formal questions about its surveillance activities. This  was documented in a recent query to the German Bundestag. According to a report of  the magazine DER SPIEGEL, the NSA kept more than 300 reports on Merkel in a special heads of state databank. For English speaking readers who want to get an up-to-date look at the still smoldering spy drama from a German perspective  in the DER SPIEGEL.

As was to be expected  Merkel’s visit confirmed that the U.S. and Germany still fail to reach a deal on spying.  The efforts to remake the German-American intelligence relationship has  collapsed. A “no-spy” agreement remains  elusive. Talking now  about  a “cyber dialogue” is nothing but agreeing on the lowest diplomatic common denominator.  So we are waiting for the new explosive revelations on how the  Anglo-Saxons spy masters are tapping the eurozone ´s key decision makers.

Will further revelations reveal how the U.S. and British intelligence agencies have been monitoring the Frankfurt banking center, including the European Central Bank  – recently empowered by EU leaders to add to its mandate become the eurozone´s lead banking supervisor – and the German Bundesbank?  And how much was the Bank of England´s top management able to share such information in the conduct of their central bank operations? And  how much will  Frankfurt s  British intelligence agency GCHQ. supported by the NSA,  in the future be used to keep an inside track on the ECB s banking watch dog decisions on 85 per cent of eurozone bank assets?

Thanks to the Snowden leaks of classified documents – now in the hands of his journalistic friends in the West, more and more is known about how U.S. intelligence agencies have been spying on major leaders from the European continent, the offices of the European Commission and its missions, and other supranational institutions such as the United Nations and the International Monetary Fund. As James Clapper, head of U.S. intelligence, told lawmakers in the U.S. Congress, discerning foreign leaders intentions is a “top tenet” of U.S. intelligence policy, adding that “foreign allies spy on U.S. officials and intelligence agencies as a matter of routine”.

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