After a three-year political battle over government plans to open up Germany's labour market to foreign skilled workers, the nation's parliament has finally agreed to a landmark immigration law. Andrew McCathie takes a look at the new rules.

Germany has taken another big step towards freeing up its rigid labour market with the passage though the upper house of parliament of landmark immigration legislation aimed at drawing foreign skilled workers to Europe's biggest economy.

Agreement on the legislation, which follows a three-year battle to bring the country's immigration laws into line with nations such as Canada and the United States, will allow for the regulated entry into the country of skilled immigrants.

Indeed it was only after the intervention of party leaders including German Chancellor Gerhard Schroeder in negotiations between the government and the conservative opposition that a compromise was finally hammered out on the new set of immigration rules, which also includes measures to attract those wanting to establish businesses in Germany.

In particular, however, Berlin hopes that the new law will help to fill gaps in the German workforce, notably in the sectors of information technology (IT), engineering and health with the nation's business leaders spearheading the drive for immigration law reform.

The law is to come into force on 1 January next year with much of the work of implementing the new legislation to be carried by new body called the federal office for migration (Bundesamt fuer Migration.)

Coming in the wake of the heightened terrorist alert in Europe following the Madrid railway station bombings in March and an embarrassing series of mishaps over the failure of Cologne city authorities to deport a radical Islamic preacher, the new immigration law includes tough security provisions.

What is in the new law?

• Improvements in the residence status for persons who have been victims of gender discrimination in other nations.

• A right to government integration assistance such as language courses. A set of sanctions has also been included for immigrants who refuse to take part in the integration programmes.

• The number of different forms of residence permits ('Aufenthaltsgenehmigung' or 'Aufenthaltserlaubnis' ) are reduced from five to two – one for a restricted time and the other granting unlimited entry ('unbefristete Aufenthaltserlaubnis).

• The type of work permit granted will depend on the reasons for being in Germany – such as training, work, family reunion or humanitarian reasons.

• Highly qualified workers such as scientists or computer experts are likely to be granted an 'unbefristete Aufenthaltserlaubnis' so as to help them settle in the country.

• Foreign students are now allowed to remain in Germany for a year after they complete their studies and to find work and a livelihood.

• Restriction on German employers seeking low-or-no skilled foreign workers remains.

• Citizens of countries which joined the European Union on 1 May are only able to take a post in Germany if there are no other applicants from Germany or other long-standing EU member states.
• EU citizens are no longer required to arrange an 'Aufenthaltsgenehmigung' or 'Aufenthaltserlaubnis'. The only requirement is that they, as is the case with German citizens, register their residential address with local authorities at the Einwohnermeldeamt/Meldestelle.

• Residence permits will also granted those who are prepared to invest at least EUR one million in Germany or to create a minimum of ten jobs.

• Foreigners are to be expelled on the basis of circumstantial evidence of danger with immigrants to be screened by the domestic intelligence agency. Applicants are to face routine background checks.

• Germany is also to seek approval of a computerised warning system at the European level by 2006. But if it is not in place by then, Berlin will proceed to introduce at the national level.

There are currently more than seven million foreigners living in Germany or about nine percent of the population with most of them (mainly from Turkey) coming to the nation as so-called guest workers over the last four decades to take up often menial low-skilled industrial jobs in the country as the post-Second World War "Wirtschaftswunder" (economic miracle) rapidly took shape.

But the growing importance of Germany's IT industry plus the slow shift in the nation's economic balance away from manufacturing towards the service sector has dramatically changed the profile of the type of foreign worker that the nation is now after with Berlin actively seeking highly skilled professionals from countries such as India and Indonesia as well Central and Eastern Europe.

"Germany must participate in the worldwide competition for the best brains," said German Employer chief Dieter Hundt.

Germany might have the highest proportion of foreigners in the European Union, but it has lacked the mechanism to regulate the flow of skilled workers into the nation.

In a bid to address Germany's growing labour shortages, Berlin launched a US-style Green Card with more than 16,000 cards issued since they were introduced four years ago.

The government has also moved to liberalise the nation's antiquated citizenship laws as well as speeding up the process for obtaining a German passport.

But according to the Cologne-based Institute for the German Economy, there are still 20,000 vacancies in the nation for highly qualified workers that cannot be filled.

This is despite three-years of economic stagnation and more than four million registered out of work with the jobless rate stuck at a sobering 10.5 percent.

Moreover, faced with soaring deficits across its welfare system and a rapidly ageing population, Germany also needs to consider drawing in immigrants as a way of helping to generate new revenue for the hard-pressed social state.

The greying of the German population and the prospect that the nation's labour force will shrink from 42 million to 30 million over the next 50 years is only serving to accentuate the country's skilled labour shortages with the country's pool of highly qualified workers forecast to fall by two million to 8.9 million over the next half a century.

July 2004

Andrew McCathie is the editor of Expatica Germany (www.expatica.com).