The controversy over German cooperation with American surveillance activities deepened Sunday with reports that the U.S. National Security Agency (NSA) tapped Germany’s BND intelligence service to help spy on the Munich-based industrial giant Siemens AG. Reported in Bild am Sonntag, the allegations raise uncomfortable questions for Chancellor Angela Merkel, whose left-right political coalition has been strained by news that the BND conducted surveillance on European officials for the NSA.

According to the allegations in the German weekly newspaper, the NSA requested the BND conduct intelligence operations not only at Siemens but also at the aircraft manufacturer Airbus Group NV, headquartered in Toulouse, France. Siemens had reportedly entered into a contract to provide communications equipment to a Russian intelligence agency, the newspaper reported, citing anonymous U.S. intelligence sources.

A Siemens representative denied the allegation about the company’s connection  with a Russian intelligence agency in a statement made to Reuters.

According to Bild am Sonntag, it was unclear whether the German intelligence service had agreed to cooperate with the NSA to spy on Siemens.

Concerns over NSA surveillance in Germany exploded in 2013 when revelations surfaced that the U.S. had eavesdropped on Merkel’s personal cell phone. Memories of surveillance overreach by the Nazis and East German secret police still haunt the German public.

Amid heightening scrutiny of the BND and its cooperation with American spies, Merkel reaffirmed last week Germany’s commitment to assist the intelliegence efforts of international allies, including the NSA. The BND had allegedly snooped on European Union leaders and the French government on behalf of U.S. intelligence services.

The reports have created a political firestorm in Germany. Members of the center-left Social Democratic Party (SDP) have moved to make public key details of the BND’s cooperation with the NSA.

Last week, German media reported the government had abruptly halted a program through which it supplied Internet data to the NSA, citing the U.S. agency’s failure to provide full justification for the dragnet surveillance.