[Udo]

You're not wrong. Our current ruling party has never been actually opposed to surveillance and is not really strong on privacy (to say the least). However, I think besides collecting cheap points with the German public, there is another factor behind this "stomping of tiny feet" as you call it:

Germany is somewhat of an economic powerhouse, but paradoxically radical innovation is culturally frowned-upon. This means that German tech is usually not ground-breaking but incrementally-improved-to-death (by heavyweight scientists with a lot of clout). Since there is reason to believe that a large part of all this spying is simply industrial espionage on behalf of big US companies, I believe the German government is afraid the local industry will quickly lose even more ground than it already has. Since innovation in this country doesn't move very fast, the damage would be long-lasting and potentially devastating.

[blablabla123]

My forecast is that many tech people will move away from public Cloud and host stuff themselves. Also German Cloud service provider will have an easier life getting customers... Eventhough this is private usage, in the long run it will also affect how people choose technical solutions in their day to day jobs.

Therefore I think the U.S. has an interest to seek a solution that Germany and other countries with significant economy are happy with.