EU needs 'German standards' on data privacy

"High German data protection standards should be the rule. US companies that do not uphold these standards should be banned from the European market."

"We need a package of measures at the EU level against mass spying by foreign secret services," she said.

Leutheusser-Schnarrenberger, who has strongly criticized the scope of the US' spying programme, noted that it should not be intelligence services that set the standards for data protection but rather "citizens' basic rights."

The EU is currently updating its data privacy legislation with the draft rules under scrutiny in the European Parliament.

The proposed laws have been subject to fierce lobbying, including by Washington.

"If a European data security sphere is to be created, then it needs stronger parliamentary control over secret services and regular, intensive information exchanges between supervisory committees," said Leutheusser-Schnarrenberger.

In Germany, where data privacy is highly valued, the issue has moved onto the political agenda ahead of elections in September.

In her last press conference before heading on holiday, Chancellor Angela Merkel was quizzed for over an hour on how much the authorities new about the US surveillance, with Germany the most spied upon country in the EU.

It has since been confirmed that Germany's own intelligence service, the BND, has had a cooperation agreement with the NSA since 2002.

According to a recent report in Der Spiegel magasine, this agreement meant the BND passed on large volumes of meta data, from telecommunications gathered abroad, to the US intelligence authorities.

At the EU level, Merkel has said she hopes the new data privacy law will be in place by May 2014.

Both France and Germany last month signed a joint declaration pledging to set up "adequate safeguards" for EU citizens' data that balance freedom with security needs.

But despite popular anger at the extent of US surveillance activities, there are significant cultural differences towards the issue.

Merkel herself has made reference to the UK where she said decades of conflict and terrorism in northern Ireland have made the country more tolerant to surveillance than Germany.

The Guardian newspaper recently revealed that the US National Security Agency has paid at least £100m to the UK spy agency GCHQ over the last three years for access to Britain's intelligence gathering programmes.

Around 60 percent of the UK’s quality intelligence was either collected directly by the NSA or came about from its work, leaked papers seen by the paper say.