President Obama flies to Europe next week for the G-8 summit in Northern Ireland and a stopover in Germany, where is he is likely to face a barrage of questions over the latest scandal to beset his administration. Unlike the other scandals brewing in Washington, the leak of classified National Security Agency documents has provoked a strong international backlash. And it’s likely cast a dark cloud over the G-8 meeting table, where one of the most prominent agenda items is “promoting greater transparency,” including government provision of “open data.”

The Guardian and the Washington Post newspapers last week published sensational and shocking details of both phone sweeping and internet spying on a major international scale. The scale and scope of the NSA secret program code named “PRISM” is breathtaking. In Washington, Democrats and Republicans have questioned the secret nature of the data-surveillance program and the creeping scope of the NSA. But while domestic political reaction has been measured, European parliamentarians and the EU data protection ombudsman are furious.

Although considered allies of the United States, European Union countries were labeled “foreigners” by the NSA and deemed legitimate targets for surveillance: the NSA snooped on all twenty-seven member states. The revelation comes after the Commission and the European Parliament have spent much of the past year considering more stringent European data-protection laws in the form of a directive that lawmakers hope to pass before next year's European elections and that would place additional restrictions on the processing of personal data.

Although European leaders have been muted so far in their responses to the revelations, the European Commission released a statement in Strasbourg last Tuesday denouncing U.S. surveillance: ”Programmes such as the so-called PRISM and the laws on the basis of which such programmes are authorised potentially endanger the fundamental right to privacy and the data protection of EU citizens.” European Commission vice-president Viviane Reding stressed that “a clear legal framework for the protection of personal data is not a luxury or constraint but a fundamental right.” She also warned U.S. attorney general Eric Holder that the nature of the American response could affect the whole transatlantic relationship.

Meanwhile, UK and Dutch government ministers have denied that their security agencies are linked in any way to PRISM. British foreign secretary William Hague denied Guardian allegations that the British intelligence agency GCHQ secretly pried on its own citizens by purging the data from big U.S. internet firms. He argued, somewhat unconvincingly, that “there is no danger of a deep state out of control in some way.” On Tuesday, the Dutch national daily De Telegraaf reported the country’s top intelligence branch, the AIVD, also worked directly with the Americans on PRISM. The Dutch are currently debating a legal proposal that would give the AIVD the power to intercept Internet traffic of its own citizens on an unlimited scale. Parliamentary inquiries are ongoing in both countries.

The timing of the scandal could not have come at a worse time in EU-United States relations, with both sides set to embark on negotiations for what would be a landmark free-trade compact, the Transatlantic Trade and Investment Partnership (TTIP). After Obama meets EU leaders in Northern Ireland, he will hold a bilateral summit with German chancellor Angela Merkel in Berlin, where he will deliver the only major speech of his European trip at the Brandenburg Gate.

Ironically, the NSA gathered more pieces of intelligence within Germany during the month of March than any other EU country. A spokesman for Merkel, the first chancellor from the former East Germany, where memories of Stasi surveillance are still fresh, said she would raise the issue with Obama. Her justice minister Sabine Leutheusser-Schnarrenberger stressed "The suspicion of excessive surveillance of communication is so alarming that it cannot be ignored. For that reason, openness and clarification by the US administration itself is paramount at this point. All facts must be put on the table.” Germany’s data commissioner Peter Schaar demanded that “the U.S. government must provide clarity regarding these monstrous allegations of total monitoring of various telecommunications and Internet services.”

But Microsoft, Google and other service providers, including Facebook, YouTube, Apple and AOL, could face even more blowback than the U.S. government or the Obama administration. Their apparently voluntary participation in U.S. government's PRISM program could open them to European lawsuits or otherwise subject them to additional regulatory scrutiny. Significant elements of their businesses are already subject to restrictions within Europe—Google faces strict restrictions on its StreetView program and Facebook's facial-recognition capability is banned altogether. As PRISM continues to dominate world headlines, Facebook on Wednesday opened its first servers outside of the United States in northern Sweden—its presence there, which like much of Scandinavia is a bastion of government transparency and personal freedom, will come increasingly under the thumb of EU regulators.

Europeans have a genuine concern that EU citizens using U.S.-based services like Facebook and Gmail have no protection against snooping by agencies like the NSA. In the United States, Obama has promised a debate on the costs and benefits of additional surveillance and the right to privacy, although he has done little to begin that debate. But at a time when he probably hoped to focus on TTIP negotiations, he will now face many more pointed inquiries about highly questionable intelligence gathering against European citizens.

Dr Michael J. Geary is a Global Europe Fellow at the Wilson Center in Washington, DC and Assistant Professor of Modern Europe and the European Union at Maastricht University in The Netherlands. Kevin A. Lees is an attorney in Washington and editor of the foreign policy blog Suffragio.org.

Image: Wikimedia Commons/Frank Vincentz. CC BY-SA 3.0.