Merkel meets the press

Chancellor Merkel used a pre-election press conference in Berlin on Friday to stress her government's role in creating the conditions that have allowed Germany's economy to remain strong despite the European sovereign debt crisis.

"This federal government is the most successful federal government since reunification," the chancellor said, quoting a statement she had made prior to the briefing.

She also highlighted the progress made in efforts to combat the sovereign debt crisis that has hit some of the eurozone's southern states the hardest, noting that public debt was gradually coming down and interest rates for sovereign debt had dropped.

NSA allegations

However, as soon as the floor was opened up for questions from reporters, many of them focused on revelations about US surveillance activities in Europe made recently by former National Security Agency (NSA) subcontractor Edward Snowden.

Merkel told reporters that she simply could not answer all of their questions about the NSA surveillance program known as “Prism.”

"It is impossible for me to provide an analysis of Prism here," the chancellor said, adding that the process of gathering information was ongoing.

At the same time, though, she reiterated her demand that any American agencies operating in Germany do so in compliance with the laws of the land.

"On German territory, German law must be complied with," the chancellor said. She also noted that Germany was not a "surveillance state," saying. "Germany is a land of freedom."

German-US friendship affected

The chancellor also conceded that because any friendship is based upon trust, the revelations of mass surveillance by the NSA had affected the relationship between Germany and one of its most important allies. At the same time though, she expressed optimism that the two countries would overcome the issue.

"If it is a good friendship, then it will survive a difficult situation," she said. At the same time though, she stressed that her government was expecting more information from the US about the spying allegations.

"Sweeping things under the carpet would do more damage than calling things by name," she said.

No new haircut for Greece

Not all of the questions were related to the NSA affair: Asked about Greece's ongoing debt crisis, the chancellor repeated her rejection of the idea of foregoing more of Athens' sovereign debt.

"I don't see a debt restructuring for Greece," she said, adding that any such move "could lead to such massive uncertainty among all investors in the eurozone that everything we have done in recent years would again be in question."

The chancellor's annual summer press conference came just weeks before Germans are to go to the polls in a federal election, to be held on September 22.

pfd/ipj (dpa, Reuters, AP)