American Express has formally protested a U.S. government decision to take away military banking-service contracts in West Germany, the Netherlands, and Greece from one of its subsidiaries. The Defense Department recently awarded the contracts to Merchants National Corp. of Indianapolis. American Express Bank Ltd. had held the contracts to act as the U.S. military paymaster and performed other banking chores in the three countries for decades. The contracts produced $3 million a year in income, American Express said. The bank said its protest, filed with the General Accounting Office, should block awarding of the contracts until the protest is resolved.