A row over US spying is expected to dominate an EU summit that gets underway this evening in Brussels, after it was revealed that Angela Merkel's phone calls may have been monitored.
The meeting is officially about boosting employment and the digital economy. But the two-day talks are likely to be overshadowed by mounting anger over US spying on Europe.
President Obama spoke to Chancellor Merkel last night after she warned of a serious breach of trust.
On Monday he had another embarrassing call with a foreign leader when he spoke to French President Francois Hollande over reports Washington had monitored millions of phone calls inside France.
An angry Merkel demanded "an immediate and comprehensive explanation" from Washington over what she warned was a serious breach of trust, her spokesman said in a statement.
Germany's conservative daily Die Welt called the alleged snooping "a punch in the face of German security agencies" while a Sueddeutsche Zeitung headline labelled it "the worst imaginable insult."
White House spokesman Jay Carney said Obama assured Merkel the US was "not monitoring and will not monitor" her communications.
