Peer Steinbrueck, Germany’s plain-speaking Finance Minister, has suggested Germany is 'declaring war' on European tax-havens.

Countries under fire include Liechtenstein, Switzerland, Luxembourg, Austria, Andorra and Monaco.

He has urged Liechtenstein to make its finance system more transparent following a wide-ranging investigation into tax evasion of wealthy German individuals.

According to the Suddeutsche Zeitung, 700 suspects are under investigation. Klaus Zumwinkel, Chief Executive of the Deutsche Post, quit two weeks ago following raids on his home and offices. Reports suggest that 3.4bn euros is concealed in Liechtenstein.

Steinbrueck hopes to establish a formal double taxation agreement with Liechtenstein but if this proves impossible has said, 'I am thinking of the possibility of making business dealings with Liechtenstein considerably more difficult.'

Liechtenstein is still on the Organisation for Economic Co-operation and Development’s list of ‘unco-operative’ tax havens.