"German law applies on German soil and anyone operating here needs to adhere to it," German Chancellor Angela Merkel said at a news conference before the summer recess. Merkel made the comment in connection with alleged US intelligence activities in Germany.

After Merkel had gone off on holiday, UK daily The Guardian published fresh revelations on the NSA software XKeyscore. The article showed a graphic that pointed to data being mined by US intelligence from servers in Germany rather than just from servers based in the US.

There is now speculation that the NSA and other US intelligence agencies obtain access to German Internet hubs via US military bases in Germany. More than 50,000 US soldiers are still based in Germany - more than the entire armed forces of Belgium. Worldwide, the US has several hundred bases.

It helps to be close by

IT specialist Sandro Gaycken from the Free University Berlin says it is highly likely that the US uses its military bases to gain access to cables. "It helps to be physically close to the data hubs you want to mine from," he told DW. "It does make sense," he added.

But can US intelligence really gain access without the German government's knowledge? Gaycken says it is possible, but unlikely. "If it's servers in allied countries, it could be that special contracts allow you direct and legal access to those systems," he explains.

Legal basis for spying

And there are agreements regulating US intelligence activities on US military bases in Germany. In 1968, the G10 law was passed, regulating the surveillance of postal and telecommunications services by German intelligence agencies.

The law also included an administrative agreement that allowed wiretapping and surveillance by the allied forces in Germany for the purpose of protecting the troops.

On Friday (02.08.2013) Germany's Foreign Ministry declared that "the administrative agreement from 1968/69 in connection with the G10 law" with the US and the UK was being suspended "by mutual consent."

German Foreign Minister Guido Westerwelle called it "a necessary and correct consequence resulting from the recent debates about privacy."

Purely symbolic?

But the announcement has not changed anything, as the agreement has long been obsolete, according to a government spokesman, who said on July 8 that it had not been applied since reunification in 1990.

And so the speculating continues as to the legality of the NSA's activities in Germany. What is clear is that US intelligence agencies operate on US military bases in Germany.

The German Defense Ministry issued a paper listing companies that profited from discounts available to those who do business with US forces in Germany. The paper names 207 companies that were granted discounts "for analytical services."

"Senior intelligence systems analyst" or "signal intelligence analyst" are two job descriptions that would have fit the bill, according to the paper.

The German government told reporters on July 31 that "analytical activities" included technical, military services. But they said they were not exactly sure what that entails.

The firm whistleblower Edward Snowden worked for, Booz Allen Hamilton, was granted a license for "intelligence operations" in Germany, according to a German Foreign Ministry source from November 28, 2008.

What happened in the Dagger complex?

Some of the companies eligible for those discounts may well be working for the NSA in the Dagger complex in Griesheim near Darmstadt. More than 1,000 US intelligence agents work in this predominantly underground complex.

"Germany could demand for the US to close down a facility like the one in Griesheim - if Germany took the view that the Americans are violating Germans' civil rights," says intelligence expert Erich Schmidt-Eenboom.

"But that would mean confrontation, also between the various agencies. And that's something the relatively small [German Foreign Intelligence Service] BND cannot afford."