If you truly wish to begin from the premise that Chancellor Merkel is engaged in a veiled attack on Administration policy, feel free. If that is the case, however, I'll point out that President Bush appears to be following her advice. (Not to suggest that he is somehow beholden to her, but merely another observation).
Having the German Chancellor even dare to mention anything regarding communications intercepts is ludicrous. I worked in Kerpin on a Deutsche Telekomm government "Lawful Interdiction Device". The German government has communications intercepts down to an art form. They monitor all internet, voice, video, and data that touches the network. 100%. And there are no warrants. How DARE Merkel criticize the USA.