This is a funny little thing. Essentially Bush was being a bit...familiar with the lady PM from Germany. She didn't like it. The outrage of this linked post is silly, however, as Texans do rub shoulders of peers occasionally (and Bush likes to act like one), and it's not that big a deal.
"UPDATE: George W. Bush's sexual harassment of the Chancellor Merkle has pushed the wingnuts over the edge. "Actually, Taylor Marsh, it has pushed you over as well.