German Chancellor Olaf Scholz has sacked Finance Minister Christian Lindner after weeks of debate over the government's economic direction, sources told Reuters.
The Bild newspaper previously reported that Lindner proposed early elections as a solution to the budget impasse, which Scholz rejected.
It was not clear whether Lindner's dismissal would also lead to the exit of the Free Democrats (FDP) from the coalition.
Without the FDP, Scholz could continue to lead a minority government, either alone with his Social Democrats or with the Greens, the second largest party, relying on ad hoc parliamentary majorities.
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