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German Chancellor Angela Merkel has thrown her weight behind the idea of keeping European online communications within Europe where possible.

The show of support for the plan, which was initially floated by European telecoms giant Deutsche Telekom, follows the collapse of hopes in Germany that the U.S. might agree a no-spy agreement with the country. In a separate move, Germany is reportedly planning to step up its own surveillance of embassies belonging to the U.S. and the U.K.

“We’ll talk with France about how we can maintain a high level of data protection,” Merkel said on Saturday. “Above all, we’ll talk about European providers that offer security for our citizens, so that one shouldn’t have to send emails and other information across the Atlantic. Rather, one could build up a communication network inside Europe.”

“Within Europe”

Deutsche Telekom’s proposal, for keeping German data within German borders, is partly a marketing exercise based on an existing agreement between it and the other big German webmail provider, United Internet. The two providers already had a so-called “De-Mail” alliance (playing on the country code “DE” for “Deutschland”) that involved a shared infrastructure for handling emails linked to the user’s offline identity.

In August, they added encryption across the system and started promoting “E-mail made in Germany” as a shield against prying American and British eyes. Deutsche Telekom said it also wanted to avoid communications sent between German parties being routed via the U.S., where possible.

On Saturday, Merkel said in a podcast that she and French President Francois Hollande would this week discuss which European providers might help create such a framework on a regional basis.

Merkel also hinted at her dissatisfaction with the way in which U.S. web giants such as Google(s goog) and Facebook(s fb) base their operations in the European country “where data protection is weakest” (that would be Ireland, then). “That is a situation which we also cannot countenance forever,” she said.

The European Commission reacted warmly to the idea of promoting European communications and data storage services. The office of digital agenda commissioner Neelie Kroes highlighted various pieces of legislation that are being worked on, such as the new Data Protection Regulation, as well as Commission-funded encryption research.

“We support Chancellor Merkel’s calls for better networks, and better data protection and security on those networks, as part of a broader digital industrial policy,” Kroes’s office said in a statement. “We hope that that Franco-German discussion on Wednesday, and the discussion with leading industrialists, will lead to an acceleration of work on important European legislation in this domain.”

Of course, keeping communications within European borders is no guarantee of data protection. The NSA’s British counterpart, GCHQ, has proven very adept at tapping most of the world’s communications infrastructure, so data could certainly be monitored even if it doesn’t pass through the U.S. That said, there is more jurisdictional protection for data that doesn’t head out that way, compared with data that is stored on or passes through U.S. systems.

“Treat them all the same way”

The surveillance of Germans by the NSA and its partners has generally raised more alarm among citizens and German businesses, which fear economic espionage, than it has in government. Indeed, apart from outrage over the surveillance of German politicians, Merkel’s main response has been to lobby for Germany to be included in the spy pact that binds the U.S., U.K., Canada, Australia and New Zealand.

A key feature of the “Five Eyes” pact, more properly known as the UKUSA agreement, has supposedly been that its members don’t spy on one another (though there’s plenty to suggest that they spy on one another’s citizens when that can help bypass national privacy laws).

However, that meme was unceremoniously blown out of the water last week when President Barack Obama said the U.S. had no no-spy agreement with any country.

Obama had just come out of talks with Hollande, who also wanted in on the pact. He somewhat patronizingly told reporters: “I have two daughters and they are both gorgeous and wonderful, and I would never choose between them. And that’s how I feel about my outstanding European partners.”

Germany will now treat the U.S. with the same suspicion it applies to China, Russia and North Korea. “We need to cease the differentiation and treat them all the same way,” Der Spiegel quoted the chairman of the German parliamentary intelligence oversight committee as saying.