German ISPs Can't Retain Data Europe Says They Must Retain?

This one is a bit unclear, and we'd appreciate it if someone who knows more about the specifics could fill in the details, but there seems to be some contradictory rules in Germany concerning what sort of data an ISP retains on its customers. After all, the European Parliament has now said that data retention by ISPs is a must, even if it's a pointless and costly endeavor. However, the Inquirer is reporting on a case in Germany where the courts have apparently said that any data that is not needed for billing purposes cannot be retained, as it's a violation of subscriber privacy. According to the article, this means ISPs can't even store the IP addresses of websites you visit. So, if we understand this correctly, the EU is saying that ISPs need to keep lots of data... which the German courts are saying is an illegal violation of privacy.