The German government has condemned an official with the country's central bank on the publication of his book on immigration issues.
Bundesbank board member Thilo Sarrazin's book, Germany Abolishes Itself, states that Muslim immigrants refuse to integrate.
In a newspaper interview about the book, he said that "all Jews share a particular gene".
The Bundesbank distanced itself from Mr Sarrazin.
"The government views the reputation of the Bundesbank as definitely harmed, domestically and abroad, by Mr Sarrazin's comments," said Chancellor Angela Merkel's spokesman Steffen Seibert.
"The Bundesbank must be concerned about this."
On Sunday, Mrs Merkel said Mr Sarrazin's remarks were "completely unacceptable" and urged the Bundesbank to act.
In a statement published on Monday, the Bundesbank condemned Mr Sarrazin's remarks as "discriminatory".
It said the bank's executive board would meet with Mr Sarrazin before deciding on further measures.
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 can't imagine the chancellor has had the time to read my book."
"It's very balanced," he said.
In the book he says that Muslim immigrants are a drain on German society.
Mr Sarrazin writes: "I don't 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 Germany's Jewish and Turkish communities have condemned the book as racist.
Based on advance orders, it has shot to the top of Germany's sales chart.