The German government has condemned an official with the countrys central bank on the publication of his book on immigration issues.
Bundesbank member Thilo Sarrazins book, Germany Abolishes Itself, states that Muslim immigrants refuse to integrate and are a drain on society.
In a newspaper interview about the book, he said that "all Jews share a particular gene".
The Bundesbank board was to make a decision on his future later on Monday.
Completely unacceptable"The government views the reputation of the Bundesbank as definitely harmed, domestically and abroad, by Mr Sarrazins comments," said Chancellor Angela Merkels spokesman Steffen Seibert.
"The Bundesbank must be concerned about this."
On Sunday, Mrs Merkel said Mr Sarrazins remarks were "completely unacceptable" and urged the Bundesbank to act.
The Social Democratic Party, of which Mr Sarrazin is a long-standing member, said it was taking action to expel Mr Sarrazin.
Mr Sarrazin has defended his comments and his writing, saying: "I cant imagine the chancellor has had the time to read my book."
"Its very balanced," he said.
In the book he writes: "I dont want us to end up as strangers in our own land, not even on a regional basis."
He also writes that "most of the cultural and economic problems are concentrated in a group of the five to six million immigrants from Muslim countries".
Germany has more than four million Muslims, most of them of Turkish origin.
Members of Germanys Jewish and Turkish communities have condemned the book as racist.
Based on advance orders, it has shot to the top of Germanys sales chart.
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