The Observer -- US to punish German 'treachery'

Rumsfeld loses control, horifies State Department in vow to make an example of Germany

America is to punish Germany for leading international opposition to a war against Iraq. The US will withdraw all its troops and bases from there and end military and industrial co-operation between the two countries - moves that could cost the Germans billions of euros.

The plan - discussed by Pentagon officials and military chiefs last week on the orders of Defence Secretary Donald Rumsfeld - is designed 'to harm' the German economy to make an example of the country for what US hawks see as Chancellor Gerhard Schröder's 'treachery'.

'We are doing this for one reason only: to harm the German economy,' one source told The Observer last week.

The Pentagon plan - and the language expressed by officials close to Rumsfeld - has horrified State Department officials, who believe that bullying other countries to follow the US line will further exacerbate anti-Americanism and alienate those European countries that might support a United Nations resolution authorising a war.