UPDATE 2-Germany to let in Eastern European engineers early

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By Paul Carrel

Germany will open its doors to engineers from eastern Europe from November to help compensate for a skills shortage in the sector that risks holding back economic growth, the government said on Friday.

The cabinet, meeting at a retreat outside Berlin, agreed to relax a complex immigration process for foreign engineers and to ease working restrictions for foreign students who have studied in Germany and want to work here.

"We want immigration regulations to provide sufficient high-qualified skilled workers for the labour market and to strengthen the position of our country in the competition for the best (workers)," a cabinet document from the meeting read.

"To this end, the government will develop an immigration concept that will support our country's interests in the coming decade," the document added.

The relaxed immigration conditions would apply to engineers from the 12 new, mainly Eastern European EU countries.

The decision followed complaints from the engineering sector that it lacked sufficient skilled workers. German engineering firms are facing strong demand from emerging economies like China, and exports of the goods they produce have driven growth.

A newspaper report earlier this week cited a government-commissioned study as saying a lack of skilled workers is costing Germany up to one percent of gross domestic product per year, or around 20 billion euros ($27.14 billion).

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 of 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 EU 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) ($1=.7370 Euro)

Keywords: GERMANY LABOUR/

[BERLIN/Reuters/Finance.cz]