US president Barack Obama has yet again "found himself trying to placate" foreign allies who have "discovered the extent" of US spying in their countries, says Julian Borger in The Guardian.
The scandal, which erupted after it was revealed that the US National Security Agency (NSA) had spied on 35 world leaders, including French president Franois Hollande and German chancellor Angela Merkel, raises the question of whether the "edge such secret eavesdropping provides is worth the reputational damage" it creates once it is out in the open.
"With each leak," says Borger, "US soft power haemorrhages, and hard power threatens to seep away." Deal-making between leaders is "personal". These relationships "can make the difference between success and failure", as the wrangling over Syria at the UN Security Council demonstrates. But nothing could be more personal than for a leader to be bugged by a country "considered an essential friend and ally".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
So far the damage has solely been reputational, but it could deepen. Brazilian president Dilma Rousseff is calling for a new internet system that would lock out US firms, while the European parliament is restricting the exportation of European user data to the US.
Merkel's reaction was one of "genuine outrage", but everyone is spying on everyone else, say Toby Harnden and Bojan Pancevski in The Sunday Times.
If Merkel's phone was so insecure, "then the Chinese and the Russians were probably also listening in", as well as British and French spies. The French have also spied on the Americans.
But the worry is that "German indignation, driven by public opinion", could endanger trade negotiations or mean the Germans "scale back on sharing counterterrorism intelligence".
"For a smart man, Obama professes to know very little about a great number of things going on in his administration," says Dana Milbank in The Washington Post.
According to The Wall Street Journal, the president only found out this summer what the NSA had been doing. "It stretches credulity" to think America did this without Obama's knowledge. But the White House has used this excuse before in other scandals such as the Justice Department's subpoenaing of journalists and the IRS's targeting scandal.
It would be "reassuring and much more credible" if the White House admitted Obama knew more. But it would also be "disconcerting: is it better that he didn't know about his administration's missteps or that he knew about them and didn't stop them"?
Piper Terrett is a financial journalist and author. Piper graduated from Newnham College, Cambridge, in 1997 and worked for Germaine Greer and for Adam Faith’s Money Channel before embarking on a career in business journalism.
She has worked for most top financial titles, including Investors Chronicle, Shares magazine, Yahoo! Finance and MSN Money. She lectures part-time at London Metropolitan University and is the author of four books.
SIPP holders to get cash warnings and be offered default funds
News Providers will be required to offer investors a default fund and must warn customers of the inflationary risk of cash savings the regulator has said. What the new rules mean for your retirement pot?
By Marc Shoffman Published
Zoopla: Asking price discounts hit a five-year high – is now the time to buy a property?
News Zoopla’s October House Price Index shows sellers are accepting discounts of 5.5% on average to secure a sale – we reveal where homeowners are taking the biggest asking price cuts
By Marc Shoffman Published