By Matthias Inverardi
BAD SALZUFLEN, Germany (Reuters) - Germany's Angela Merkel said on Saturday that Europe should push ahead with free-trade negotiations with the United States next week while making sure that concerns about America's secret surveillance of its EU allies are not swept under the carpet.
Though the German Chancellor told a political rally that free-trade talks are long overdue, she also said that the assistance of U.S. intelligence to thwart attacks on Germany in the past cannot justify American spying on the European Union.
"Bugging is not what friends do. The Cold War is over," Merkel said at a meeting of her conservative Christian Democratic Union party in western Germany.
With an election looming in September, when Merkel will be seeking a third term, the German opposition has tried to turn reports of widespread bugging of EU communications and institutions by the U.S. National Security Agency (NSA) into a campaign issue.
Some opposition figures have demanded that the trade talks be halted pending a clear explanation of the revelations made by the fugitive former NSA contractor Edward Snowden.
France last week softened its stance on the issue, with President Francois Hollande saying that trade talks could begin provided that efforts to clarify U.S. surveillance tactics start in parallel. France had previously said that the trade talks should be delayed by two weeks.
Germans are particularly sensitive about eavesdropping because of the intrusive surveillance in the communist German Democratic Republic (GDR) and during the Nazi era. At the same time, Merkel believes that transatlantic free trade would boost economic growth.
German Interior Minister Hans-Peter Friedrich travels to the United States at the end of next week to discuss the reports of extensive NSA surveillance on Germany.
Finance Minister Wolfgang Schaeuble sought to quell fears that Merkel herself may have been bugged as she worked.
"You can rest assured the Chancellery has special security arrangements," he told the Tagesspiegel newspaper in an interview to be published on Sunday, adding that it was unfair to lump together the United States and the GDR.
The European Commission says negotiations towards creating the world's biggest free-trade area can begin next week, though Brussels has threatened to suspend U.S. access to EU financial and travel data.
"I'm glad talks between the European Union and the United States are starting in parallel to the free-trade negotiations," said Merkel, who discussed the spying scandal with President Barack Obama on his recent visit to Berlin and since by phone.
"The United States are our partners, they are a democratic country. Their laws may be slightly different but a free-trade zone with these partners has been on the agenda for decades," she said. "We must press ahead with this in a determined way, without sweeping the other issue under the carpet."
A poll out last week suggested only 49 percent of Germans now consider the Americans not to be trustworthy allies - a low level not seen since the presidency of George W. Bush.
(Writing by Stephen Brown in Berlin; Editing by David Goodman)