A new report claims that the United States has been monitoring German Chancellor Angela Merkel's phone since 2002 and alleges that the German leader's mobile phone number had been present on a special surveillance list used by the National Security Agency as late as this past June.
The report was published in the German magazine Der Spiegel Saturday. If true, the report would mean that monitoring of Merkel's phone began before the 59-year-old was elected Chancellor in 2005. In 2002, Merkel was the leader of the conservative Christian Democratic Union, then in opposition.
It is not clear what the nature of the monitoring was, according to Der Spiegel. It is not known whether Merkel's conversations were recorded or if her contacts were scrutinized.
Earlier this week, reports of NSA monitoring of calls made by French and German citizens prompted the foreign ministries of both countries to summon the respective American ambassadors for an explanation.
The revelations stemming from leaks by former National Security Agency contractor Edward Snowden threaten to undermine U.S. foreign policy in a range of areas.
In Washington, demonstrators held up signs reading "Thank you, Edward Snowden!" as they marched and rallied near the U.S. Capitol Saturday to demand that Congress investigate the NSA's mass surveillance programs.
This vacuum-cleaner approach to data collection has rattled allies.
"The magnitude of the eavesdropping is what shocked us," former French Foreign Minister Bernard Kouchner said in a radio interview. "Let's be honest, we eavesdrop too. Everyone is listening to everyone else. But we don't have the same means as the United States, which makes us jealous."
So where in the world isn't the NSA? That's one big question raised by the disclosures. Whether the tapping of allies is a step too far might be moot.
The British ambassador to Lebanon, Tom Fletcher, tweeted this past week: "I work on assumption that 6+ countries tap my phone. Increasingly rare that diplomats say anything sensitive on calls."
Diplomatic relations are built on trust. If America's credibility is in question, the U.S. will find it harder to maintain alliances, influence world opinion and maybe even close trade deals.
Spying among allies is not new.
Madeleine Albright, secretary of state during the Clinton administration, recalled being at the United Nations and having the French ambassador ask her why she said something in a private conversation apparently intercepted by the French.
The French government protested revelations this past week that the NSA had collected 70.3 million French-based telephone and electronic message records in a 30-day period.
Albright says Snowden's disclosures have hurt U.S. policymakers.
"A lot of the things that have come out, I think are specifically damaging because they are negotiating positions and a variety of ways that we have to go about business," Albright said at a conference hosted by the Center for American Progress in Washington.
"I think it has made life very difficult for Secretary [of State John] Kerry. ... There has to be a set of private talks that, in fact, precede negotiations and I think it makes it very, very hard."
The spy flap could give the Europeans leverage in talks with the U.S. on a free trade agreement, which would join together nearly half of the global economy.
"If we go to the negotiations and we have the feeling those people with whom we negotiate know everything that we want to deal with in advance, how can we trust each other?" asked Martin Schulz, president of the European Parliament.
Claude Moniquet, a former French counterintelligence officer and now director of Brussels-based European Strategic Intelligence and Security Center, said the controversy came at a good time for Europe "to have a lever, a means of pressure ... in these negotiations."
To Henry Farrell and Martha Finnemore at George Washington University, damage from the NSA disclosures could "undermine Washington's ability to act hypocritically and get away with it."
The danger in the disclosures "lies not in the new information that they reveal but in the documented confirmation they provide of what the United States is actually doing and why," they wrote in Foreign Affairs.
"When these deeds turn out to clash with the government's public rhetoric, as they so often do, it becomes harder for U.S. allies to overlook Washington's covert behavior and easier for U.S. adversaries to justify their own."
They claim the disclosures forced Washington to abandon its "naming-and-shaming campaign against Chinese hacking."
The revelations could undercut Washington's effort to fight terrorism, says Kiron Skinner, director of the Center for International Relations and Politics at Carnegie Mellon University. The broad nature of NSA surveillance goes against the Obama administration's claim that much of U.S. espionage is carried out to combat terrorism, she said.
"If Washington undermines its own leadership or that of its allies, the collective ability of the West to combat terrorism will be compromised," Skinner said. "Allied leaders will have no incentive to put their own militaries at risk if they cannot trust U.S. leadership."
The administration asserts that the U.S. is amassing intelligence of the type gathered by all nations and that it's necessary to protect the U.S. and its allies against security threats.
Kerry discussed the NSA affair in Europe with French and Italian officials this past week.
Most governments have not retaliated, but some countries are pushing back.
Germany and France are demanding that the administration agree by year's end to new rules that could mean an end to reported American eavesdropping on foreign leaders, companies and innocent citizens.
Brazilian President Dilma Rousseff canceled her official state visit to the White House. She ordered measures aimed at greater Brazilian online independence and security after learning that the NSA intercepted her communications, hacked into the state-owned Petrobras oil company's network and spied on Brazilians.
Brazil says it is working with other countries to draft a U.N. General Assembly resolution that would guarantee people's privacy in electronic communications.
A European Parliament committee approved rules that would strengthen online privacy and outlaw the kind of data transfers the U.S. is using for its spying program.
European lawmakers have called for the suspension of an agreement that grants U.S. authorities access to bank data needed for terrorism-related investigations.
"We need trust among allies and partners," said Merkel. "Such trust now has to be built anew."
The Associated Press contributed to this report