German banks condemn financial transaction tax

German banks and financial institutes have condemned the plans by the government to introduce a financial transaction tax across the European Union (EU).

Chancellor Angela Merkel and French President Nicolas Sarkozy have been pushing to implement the tax across the EU but have strong opposition from countries such as Britain.

UK politicians have continually opposed the ruling with chancellor George Osborne damning the EU's proposal to recoup some of the costs of the banking crisis claiming it would be a "disaster" for the UK economy.

Now the German financial sector has also opposed the plan with Andreas Schmitz, president of the association of German private banks, on Wednesday saying the introduction of a financial transaction tax in the euro zone could result in businesses migrating to less-regulated territories.

Deutsche Boerse, operator of the Frankfurt Stock Exchange and the Eurex derivatives exchange, added "This is not conducive to improving systemic stability of global markets. It would make more sense to strengthen the institutions which contribute toward systemic stability; for example central counterparties in Europe."