The German government rejected suggestions it intentionally misled the public about the US’s willingness to negotiate a “no-spy” agreement between the countries.

German Chancellor Angela Merkel says trust between the US and its partners has to be restored following allegations that American intelligence targeted her mobile phone, and insisted that there must be no “spying among friends”.

Germany’s two main political parties took another step toward a coalition with a deal to ease payroll taxes and labour market regulations in order to boost the lame economy, a senior negotiator said today.