As U.S. and German officials meet this week to discuss privacy and security in the cyber realm, a German official is calling recent revelations of NSA spying on his country the "biggest strain in bilateral relations with the U.S." since the controversy surrounding the 2003 invasion of Iraq.

Actually, he said, it's "bigger than Iraq."

"Iraq was a disagreement of a foreign policy," the official, who requested anonymity, told WIRED. "This is a disagreement of a relationship between two allies."

The U.S. State Department did not respond to a request for comment.

Last year, the German news weekly Der Spiegel reported that the NSA had been eavesdropping onGerman Chancellor Angela Merkel's mobile phone. The CIA and NSA reportedly maintained a listening station at the U.S. embassy in Berlin that it used to monitor German government communications.

The German government, outraged by the spying, has reportedly ended a contract with the U.S.-based telecom Verizon out of concern that the company might be cooperating with the NSA in its eavesdropping activities. The government has also sent lists of questions to the U.S. government inquiring about its surveillance against German citizens. But, according to Der Spiegel, although the NSA promised to send "relevant documents" in response—in an effort "to re-establish transparency between the two governments"—it failed to do so.

The spying scandal has come at a particularly delicate time, as the U.S. is faced with mobilizing support to address issues like the Russian invasion of Ukraine and the rise of the militant group ISIS in Iraq. But the German official says the scandal has caused some to call into question existing perceptions about the legitimacy of U.S. interests in such matters. "Even if governments agree with the U.S. position, it's more difficult [for them] to defend that position to their electorates now," he says.

The German official notes that not all European governments share a dim view of the U.S. in the aftermath of the revelations. Countries like Germany with a recent history of authoritarianism are more sensitive to the surveillance issue than those with a longer history of democracy, he says, because they have a greater wariness of state institutions and control.

"They distrust the state [in general] and they want to make sure that they control the state and not that the state controls them," he says. "In all of Europe, with the exception of Belarus, you have solid democracies. But in some of those, you have relatively recent authoritarianism."

Another European official told WIRED the spying is likely to affect international commerce, particularly trade agreements, going forward. European countries that have other issues with regard to trade negotiations with the United States likely will use the spying as leverage to gain an upper hand in those negotiations, he says.

"The Snowden revelations have a tremendous effect on how the U.S. is seen [in Europe]," he says. "It will be very difficult to disentangle [other issues from this] and will be harder to get consensus on trade."

This aside, the meetings between U.S. and German officials this week were designed in part to address the strain between the two countries.

They met in open and closed-door meetings on Thursday and Friday to discuss a number of cyber issues. The open meeting included German Foreign Minister Frank-Walter Steinmeier, senior White House advisor John Podesta, as well as other members of government, industry, and academia. Its aim was to focus, in part, on establishing cooperation between the two countries with regard to securing critical infrastructure and addressing cyber crime. But the issue of U.S. spying loomed large over this and the closed-door proceedings.

The German official said the meetings were being viewed as an opportunity to establish understanding of the issues and, with regard to the spying scandal, "identify ways to move on" and attempt to repair the damage that's been done by the surveillance.

The overall goal, he said, "is not to ruin what has been a beautiful friendship since 1947, but to try to fix this."