UPDATE 1-Germany to let in Eastern European engineers early

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Germany could open its doors to engineers from eastern Europe as soon as this year to help compensate for a shortage of skilled workers, Economy Minister Michael Glos said on Friday.

The German cabinet, meeting at a retreat outside Berlin, agreed late on Thursday to ease tight immigration rules and let in engineers from eastern Europe as soon as possible, according to government sources.

"It could be that people from the 12 new EU countries will be allowed to work here this year," Glos told German television.

The government is particularly keen to encourage mechanical and electrical engineers. Some economists say a shortage of such labour could affect the recovery in Europe's biggest economy.

However, the decision fell short of the newcomers' demands for a complete opening of the job market.

"This is a totally minimal step that does not resolve the opening of the labour market," Czech Deputy Prime Minister Alexandr Vondra told Reuters.

"The selection of the professions shows evidently that it is in the interest of the German side ... This will be beneficial to the German economy, but we would welcome a more extensive opening of the labour market."

The employers' group Gesamtmetall, whose members employ over half Germany's industrial workforce, says the number of vacant positions in the metals and engineering sector has jumped 50 percent in the last year.

The DIHK industry group welcomed the cabinet's decision.

"We are talking about small steps to open up the labour market but they are not as bold as we would have liked," the deputy head of the DIHK, Achim Dercks, told German radio.

Germany restricted migration from new European Union states in 2004, when 10 mostly former communist Eastern European nations joined the bloc, saying an influx of migrant workers could undermine the fight against unemployment.

The ban was extended for another three years in 2006 despite growing pressure from business lobbies.

(Additional reporting by Jan Lopatka in Prague)

Keywords: GERMANY LABOUR/

[BERLIN/Reuters/Finance.cz]