That's due to revelations from former NSA leaker Edward Snowden. Snowden's documents showed the NSA targeted Merkel's own cellphone and caused an uproar in Germany.
Efforts to reach a no-spying agreement with the U.S. have faltered. Obama says the two governments are, quote, "not perfectly aligned yet" on resolving differences on how the NSA should operate on German soil. And Merkel says differences remain.
The leaders spoke at a news conference at the White House. Obama says: "There are still some gaps that need to be worked through."