German Chancellor Angela Merkel said yesterday that she favoured a financial transaction tax being introduced in the EU or for the eurozone alone, after her talks with French President Nicholas Sarkozy.

On Friday, despite facing an uphill battle for re-election this year, Mr Sarkozy threw a spanner in the works by vowing to introduce the tax on his own if necessary.

“We won’t wait for others to agree to put it in place, we’ll do it because we believe in it,” Mr Sarkozy said after talks in Paris with Italian Prime Minister Mario Monti.

But Mr Monti, who is due in Berlin for talks with Mrs Merkel tomorrow, urged France not to go it alone but said he was prepared to work for it to be introduced on an EU level.

Malta has taken a firm stand against the tax unless it is introduced on a global level. Malta’s financial services sector has flourished over the past few years so it does not like the idea of only taxing financial transactions that take place in the EU, as this could push players to non-taxed jurisdictions.

The tax is also fiercely opposed in Britain. British Prime Minister David Cameron vowed on Sunday to block any attempt to introduce an EU-wide financial transaction tax because he said it would harm jobs and prosperity in Europe.