G-8 meeting will test NSA leaks’ effect on U.S. influence

WASHINGTON — On the surface, President Obama would seem to have a strong hand as he heads to the annual Group of 8 economic summit. Instead, the meetings Monday and Tuesday seem set to provide the first test of how much his administration’s international agenda has been complicated by revelations of U.S. surveillance of telephone use and the Internet.

The issues that dominated the last several economic summits have receded in advance of the meeting, which will be held at a gorgeous golf resort in Northern Ireland. The U.S. economy, though hardly robust, is leading the West, and Obama’s persistent arguments that Europe’s austerity policies would backfire have proved mostly right. With fiscal belt-tightening, the Eurozone is in its second year of the second dip of a double-dip recession.

But the publicity given to the U.S. eavesdropping has suddenly emerged to complicate the summit as well as Obama’s scheduled visit to Germany immediately afterward.

PHOTOS: G8 summit in Northern Ireland

British Prime Minister David Cameron, who is hosting the two-day summit of the Group of 8 industrialized nations, has made trade — specifically a proposed U.S.-European Union free-trade deal — the economic centerpiece of the meeting. But even before Edward Snowden leaked secrets about the National Security Agency, the trade pact was tied up in intense discussions between U.S. and European negotiators on data privacy standards, crucial for the financial services and information industries.

Europe generally has stricter rules on online data collection and retention than the United States. And for historical reasons, Germany is especially sensitive about government spying on its citizens.

Now, those already complex issues have become more central to the discussions and have taken on a much higher profile.

“I think it will form a large component” of the G-8 discussions, “largely because, though considered allies of the United States, European countries were labeled foreigners by the NSA and deemed legitimate targets for surveillance,” said Michael Geary, a fellow on European studies at the Wilson Center in Washington.

“The NSA snooped on all member states of the European Union,” Geary said, adding that he expects European officials will be seeking answers on how much information was collected and how the data were targeted.

Obama’s deputy national security advisor, Ben Rhodes, acknowledged that the Europeans will have questions on American surveillance, given their interests in privacy and civil liberties. But the point of these NSA programs, he said, was to thwart terrorist plots, and he suggested that the U.S. had acted with cooperation from European governments.

“All of these countries at the G-8 are important counter-terrorism partners,” Rhodes told reporters at a briefing Friday. “And together, we’ve worked with them on an intelligence and security relationship to foil terrorist attacks in the United States and in Europe.”

Nonetheless, privacy is a politically potent issue in Europe, particularly in Germany. After news broke of the NSA activities, Germany’s justice minister said that “the suspicion of excessive surveillance of communication is so alarming that it cannot be ignored.”

German Chancellor Angela Merkel is expected to express her concerns Wednesday when she meets with Obama in Berlin and may do so privately during the G-8 as well.

Merkel can use the issue not only to pursue European goals about data security, but also to deflect pressure from Obama. The U.S. administration would like countries with large export surpluses, particularly Germany, to consume more to help boost demand for U.S. goods.

“She’s going to have an easier ride because of privacy issues,” one European diplomatic official said about Merkel. The official spoke on condition of anonymity because of the sensitivity of the situation.

Germany’s reaction to the spying activity reflects its memories of the former East Germany’s notorious secret police, but data privacy is also a top concern in Nordic countries and the European Parliament as a whole. In the months before the Snowden leaks, European officials had been working to update the EU’s data protection rules, which already are stricter than those in the U.S.

Jan Philipp Albrecht, a 30-year-old German member of the European Parliament, has been pressing for stronger regulations on the collection and processing of individual online data for EU citizens no matter where the tech companies are based or where their servers are located.

“It has an influence for sure,” Albrecht said of Snowden’s leaks. The news showed how much the issue turns on private firms, not governments, he said. And it strengthens the view that “there should be minimization of data collection, and it should be for a fixed purpose, and personal data should be deleted” as promptly as possible, he said.

“Will there be a common transatlantic standard which gives individuals control of personal information?” Albrecht said.

PHOTOS: G8 summit in Northern Ireland

Before the latest revelations, Albrecht and his supporters were largely seen as extreme, but not anymore, said Fredrik Erixon, director of the Brussels-based European Center for International Political Economy.

Like other analysts, Erixon says it remains to be seen how much the Snowden affair affects the transatlantic free-trade talks, but there is no doubt some effect will be felt.

“Privately the Europeans will be extremely vocal about their concerns on this, and it will be — it will have to come out in Berlin,” said Heather Conley, director of the Europe program at the Center for Strategic and International Studies in Washington.

“This issue actually could be a major stumbling block,” she said. “This has raised some important questions.”

don.lee@latimes.com