While European leaders condemned the United States for its intrusive surveillance tactics, those same leaders have delayed a pan-European data-protection law to limit privacy violations.
Two days after Chancellor Angela Merkel of Germany phoned President Barack Obama to complain about the US monitoring her mobile phone, she joined European leaders at a summit in Brussels where they agreed to delay a new data privacy law, perhaps putting it off until 2015, after next May's elections for a new European Parliament.
The proposed privacy law would restrict how data collected in Europe by firms such as Google and Facebook is shared with non-EU countries, offer EU citizens the right to request that their digital footsteps be erased, and impose fines of €100 million (HK$775 million) or more on rule breakers. The US has expressed concern that the regulations could raise the cost of doing business.
The legislation has been under consideration for two years and has become tangled in rival national grudges and corporate lobbying. The process has shown how hard it is for Europe to agree on protecting privacy, something nearly everyone supports in principle.
Postponing decisions is a routine event for Europe's cumbersome governing process. But Germany's acquiescence to an effort led by Britain to put a freeze on the privacy measures was ironic: as European officials loudly squawked about privacy violations, they seemed to acknowledge the difficulties with ending other forms of secret monitoring.
"Everyone is very eager to protect privacy in their public statements," says Miriam Artino, a policy analyst at La Quadrature du Net, a French organisation that promotes digital rights and liberties. "But we can see that government leaders are not very enthusiastic and are looking for ways to delay the process."
The disclosures concerning the National Security Agency's activities by whistle-blower Edward Snowden have sparked a fierce debate on both sides of the Atlantic about the proper balance between privacy and economic, security and other interests.
Other classified documents revealed by Snowden later disclosed that the NSA monitored the phone conversations of 35 world leaders after it was given the numbers by a separate US government department.
To control the damage, the Obama administration indicated on Monday that it was preparing to ban surveillance of friendly foreign leaders. Merkel is staying silent about the shift. But officials in Berlin apparently realise that US economic interests could be harmed if the monitoring persists.
Spying has also damaged the standing of European politicians, who are trying to downplay their own secret surveillance.
For years Britain's intelligence service has been known to have co-operated with the NSA, even monitoring on behalf of the US. Yet the director of the NSA, General Keith Alexander, testified before Congress on Tuesday that reports that his agency had collected the phone records of millions of Europeans were "completely false". He said European intelligence services had themselves collected phone records in war zones and other areas outside their borders and shared them with the US.
Business groups in the US and Europe have complained about the proposed European Parliament legislation. Sceptics raised concerns that the issue would complicate negotiations on a trade agreement between Europe and the US, a pact that many European leaders believe will help boost Europe's sluggish economy.
Many members of the current parliament and officials at the European Commission, the European Union's executive arm, had hoped the law would pass before next summer.
The decision to stall shows that "the Germans are not on the forefront when it comes to better privacy protection for its citizens, but the French, Italians and Spanish are", says Jan Philipp Albrecht, a German Parliament member leading the push for the law.
Peter Schaar, Germany's federal data protection commissioner and a long-time critic of America's data privacy policies, has scolded European leaders for delaying.
"Whoever delays this reform is endangering it in an irresponsible way," Schaar says.
Immediately after last week's meeting in Brussels, Viviane Reding, an outspoken vice president of the European Commission and a proponent of firm privacy rules, insisted that France, Poland and Italy were still pushing for a strong law in 2014.
The US has also complicated matters, lobbying hard in Brussels against aspects of the proposed rules that Washington and US businesses do not like. Two years ago, urged by the US, the commission abandoned a measure that would have shielded Europeans from requests by US authorities to share online data gathered by some of the biggest US internet companies, which many in Europe use.
That measure was restored after a panel of European Union lawmakers early last week backed a stipulation that could require US companies like Google and Yahoo to seek clearance from European officials before complying with US warrants seeking private data. US technology companies worry that fines for breaking those rules could run as high as 5 per cent of a company's global annual revenue or €100 million, whichever is higher.
Albrecht, the German lawmaker, says one reason Germany joined Britain in slowing down the approval process was the strong influence of the technology industry.
"Lobbying also at the level of the heads of state plays a role," Albrecht says. He referred to recent news reports that Eric Schmidt, the executive chairman of Google, had served as an adviser to British prime minister David Cameron.
Perhaps no European leader is as conflicted by the pitfalls and possibilities of digital technology as Merkel. A trained scientist herself, she is keenly aware that Europe trails behind the US in digital technology, and often reminds audiences that there are no Googles, Apples or Facebooks on a troubled continent that is missing out on economic growth.
Still, she defends Germany's strict data protection laws, which are an outgrowth of the Nazi and communist past.
Raised in East Germany, Merkel is well aware of the tools that governments can employ to spy on its citizens. No doubt she sees the US as a bastion of civil liberties. Seeing this vision dashed over the past week certainly helped fuel her anger with Washington.
Recent events have posed a political quandary for her. No doubt furious that her privacy had been breached, Merkel wanted to fend off criticism at home that she had failed to react vigorously to last summer's initial disclosures that the US had extensively eavesdropped on millions of Germans, and that she became engaged with the issue only after her personal privacy had been breached.
At a news conference Merkel says she couldn't promise agreement on data-protection because of deep divisions between the member countries.
Additional reporting by ReutersTopics: Focus More on this: