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German police cannot decipher the encryption used by Skype, and they're complaining about it. How can they monitor all those bad guys if Skype encrypts the damn data? It's so unfair.
"The encryption with Skype telephone software ... creates grave difficulties for us," said Joerg Ziercke, president of Germany's Federal Police Office (BKA). Well, the thing about encryption is that it should create problems for those trying to decipher the message. That's the whole idea. But, the German authorities aren't really talking to Skype about this; in fact, since using spyware to collect information from a person's computer is illegal in Germany, this is probably just pressure to legalize this practice.
Skype uses RSA for key negotiation and the Advanced Encryption Standard to encrypt conversations; these are solid standards, widely recognized for their security. However, if you're willing to put on your tinfoil hat for a moment, you can always consider the possibility that the NSA put backdoors in some of those standards in the first place.