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German central bank considers director's ouster, media reports

FRANKFURT — Agence France-Presse | 9/1/2010 12:00:00 AM |

Germany's central bank on Wednesday was considering opening proceedings to oust one of its directors, Thilo Sarrazin, amid a scandal that could harm Bundesbank President Axel Weber, press reports said.

Germany's central bank on Wednesday was considering opening proceedings to oust one of its directors, Thilo Sarrazin, amid a scandal that could harm Bundesbank President Axel Weber, press reports said.

Sarrazin roused a storm of protest with a new book, "Germany Does Itself In," in which he claims that Muslim immigration will damage the country in the long run.

The banker also spoke of a specific "Jewish gene" and provoked a sharp rebuke from Chancellor Angela Merkel, who termed his remarks "completely unacceptable."

Sarrazin can only be removed by Germany's president following a vote by the bank's board.

"The Bundesbank wants to take a decision as quickly as possible regarding the controversy," the business daily Handelsblatt said on Wednesday.

A spokeswoman for the bank told AFP it was holding a regularly scheduled meeting but declined to say if the Sarrazin affair was on the agenda.

It could harm Weber's chances of becoming the next European Central Bank president when Jean-Claude Trichet steps down in October 2011, media and analysts say.

In firing Sarrazin, the Bundesbank, which prides itself on its independence, could be criticized for giving in to pressure from politicians and infringing free speech.

Handelsblatt said Sarrazin was called to address the matter with other board members Tuesday, a procedural step before a bank recommendation to German President Christian Wulff.

Sarrazin has already been stripped of many responsibilities at the bank following earlier comments deemed rascist, and the Bundesbank said Monday it had nothing to do with his latest "discriminatory declarations."

But the decision to fire a board member "has never been taken in the history of the Bundesbank," Barclays Capital economist Thorsten Polleit noted, and Germans defend the right to free speech as much as they slam racial prejudice.

German media have sharply criticized Sarrazin, but most have also said the country cannot ignore the immigration issue.

The daily Westdeutsche Zeitung wrote Monday: "The topics Sarrazin addresses in his book are not only sensitive but decisive for the future."

"Even if most enlightened citizens think his comments are politically incorrect, we should not put a positive spin on the problems: There is a lot going wrong with integration in Germany."

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