German intelligence agency to step up counterintelligence -official BERLIN (Reuters) - Germany's domestic intelligence agency is planning to expand its counterintelligence operations to include friendly countries following revelations about the United States' extensive spying program, a senior German security official said. The disclosure of eavesdropping by the U.S. National Security Agency, which media reports said included tapping German Chancellor Angela Merkel's cellphone, have been a wake-up call for a state that traditionally did not spy on its allies. Germany's domestic intelligence agency has until now only systematically observed countries of concern, while allies in the European Union and NATO were observed only if there was a concrete suspicion, such as that they were spying on Germany or recruiting spies in the country, the official said. But given the NSA revelations, the agency will in future need to have a 360-degree view which will include friendly countries, the official said. That would involve more costs and the agency will ask the future government for extra money to expand its counterintelligence operations. "We certainly won't be able to do that for free," the official said, citing requirements including technical training. The agency also plans to work more closely with universities and research institutes, the official said. The NSA revelations have been weighing on the relationship between Germany and the United States for months and have struck a raw nerve in Germany, where privacy is considered sacrosanct and people remember snooping by the Nazis and East German secret police. A draft coalition document, produced by a foreign affairs working group that has been negotiating a policy blueprint for a new German government, shows Germany is seeking "credible and verifiable" commitments from the United States to guarantee the privacy of German citizens. Reporting by Sabine Siebold; Writing by Michelle Martin; Editing by Mohammad Zargham