Germany outraged (again) over U.S. spying on it by Geoffrey Smith @FortuneMagazine July 7, 2014, 11:28 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons German officials reacted ominously Monday to the latest allegations of U.S. spying, saying that the affair threatened to make a return to ‘business as usual’ impossible. The air over Germany has been thick with moral outrage over the weekend after revelations that an employee of Germany’s secret service, the Bundesnachrichtendienst or BND, had been arrested on suspicion of passing information to the CIA in return for cash payments. Reports citing political and diplomatic sources said the employee had passed information to the CIA from the very parliamentary committee that Germany set up last year to look into allegations made by former NSA analyst Edward Snowden. According to the newspaper Bild-Zeitung, officials swooped when the man tried to sell information to Russia. But as they made the arrest, he admitted “I’ve been selling to the Americans for two years already!” The furore over Snowden’s disclosures–including accusations that the U.S. had tapped the mobile phone of Chancellor Angela Merkel–has never really died down. Currently on an official visit to China, Merkel told a press conference that, if confirmed, the “serious” allegations “would be for me a clear contradiction of what I consider to be trusting cooperation between agencies and partners.” Foreign Minister Frank-Walter Steinmeier also weighed in, saying that if it’s confirmed that U.S. services are involved, “it will become a political issue and we can’t just get back to business as usual,” Reuters reported. Lower-ranking officials have been less restrained, with senior Bundestag members calling for the expulsion of the BND agent’s U.S. handlers from Germany. The newspaper Bild-Zeitung, meanwhile, reported Interior Minister Thomas de Maiziere as telling colleagues that they should be prepared to get themselves “a 360-degree view” by spying back on Germany’s western allies such as U.S., U.K. and France. The Interior Ministry didn’t immediately respond to a request for comment, but any such step would represent a dramatic watershed in post-war German policy. Acutely conscious of the excesses of the Nazi-era Gestapo and the communist East German Stasi, spying is something the Federal Republic would still rather pretend it didn’t have to do–especially if by doing so it casts doubt on its anchoring in the Atlantic alliance. Attempts by Merkel to agree a mutual “no spying” arrangement with the U.S. were rejected by Washington last year. Snowden’s disclosures have already encouraged some in Germany to hold back in the new free trade initiative between the E.U. and the U.S., known as the Transatlantic Trade and Investment Partnership, or TTIP. U.S. internet and digital giants are set to be among the biggest beneficiaries of those talks. “Free trade and spying don’t mix,” said Ralf Stegner, a deputy head of the Social Democratic Party (Merkel’s coalition partners), told the newspaper Handelsblatt.