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New German Law Skirts Comprehensive Immigration Reform
By Rainer Münz
Hamburg Institute of International Economics
Germany has passed a new immigration law aimed mainly at coping with several pressing issues and dilemmas: first, how to integrate immigrants; second, how to manage asylum; and third, whether and how to recruit foreigners to fill out the country's thinning domestic work force. However, many analysts believe the new legislation falls short of what is needed to confront the vast demographic and labor market challenges ahead of Germany.
Germany needs immigrants, as do the other countries of Europe. Throughout the coming decades, the pool of native-born Germans of working age will shrink considerably. This is one consequence of Germany's plummeting birth rates. At the same time, in contrast, the number of German senior citizens will continue to soar for at least another 40 years. This is a result of rising life expectancies, as well as the fact that the age groups now reaching retirement were too young to be decimated during World War II.
These demographic developments will most likely have a negative economic impact. The fact is, fewer and fewer young people with cutting-edge knowledge are entering the job market. Moreover, this shrinking pool of young workers must support the ever-climbing number of seniors. This growing demographic imbalance reduces flexibility in terms of wages and salary increases. Simultaneously, this imbalance is making it more difficult to maintain current pension levels. None of these factors make German businesses more competitive, or increase the country's attractiveness to foreign investors.
Two options could provide a remedy: Europeans could either work more years of their lifetime, or they could try to lure attractive immigrant workers to their respective countries. The problem, however, is that the majority of Germans believe both of these possible solutions pose a bigger problem than the looming risk of diminished standards of living and loss of competitiveness. Immigration is presently unpopular and will continue to be unpopular in most countries of Europe, including Germany, where a majority see it as a threat to high wages, the welfare state, ethnic and religious homogeneity, etc. The idea of a higher retirement age to retain workers is also unpopular. But there are no viable alternatives. Even if newly introduced monetary incentives increase birth rates, children born next year will not enter the workforce before 2025. Even worse, more highly educated domestic employees born next year will not be available until 2030 at the earliest.
In 2000, German politicians set out to deal with these issues by proposing to draft the most modern immigration law in Europe. However, the Social Democrat-Green Party coalition that runs the federal government initially did not want to push this legislation through the lower house of German parliament (Bundestag) where it holds a narrow majority. So attempts were made to build a wider consensus. In mid-2000, following consultations with Chancellor Gerhard Schröder, Minister of the Interior Otto Schily created an independent commission. Schily, a Social Democrat (SPD), appointed the prominent Christian Democratic Union (CDU) opposition politician Rita Süssmuth as chair of the commission. High-level representatives of employers assiciations, trade unions, churches, local governments, and politicial parties were appointed as additional commissioners, bringing their organizations into the consensus-building process.
Exactly three years ago, the Süssmuth Commission published its extensive report. The report included three key recommendations: the active selection of qualified immigrants, following the example of the classic immigration countries; the active promotion of integration by way of language and cultural awareness courses for immigrants; and an overhaul of asylum rules. Of these, the proactive selection of immigrants via a skills-based point system was the primary element intended to give Germany a decisive edge in the international competition for economically attractive migrants. The positive experiences of Canada and Australia with the point system functioned as models for the commission.
However, the ambitous attempt at creating a pioneering immigration law for the future has failed—in fact, the final legislation even avoids the German term that would designate it as an immigration law. The CDU rejected the plan in its original form, despite the fact that the party's own experts, led by Saarland Minister-President Peter Müller, had come up with very similar proposals. The Bavarian Christian Social Union (CSU) found nothing redeeming in an active immigration policy as a matter of principle. The ruling coalition lacked a majority in the Bundesrat (the upper house of the German parliament, representing the 16 German states) to push the measures through. The majority of the 16 states have CDU and CSU-led regional governments. And the Christian conservative parties' opposition to any proactive migration policy has increasingly garnered public support. The reform project was further burdened by the September 11 terrorist attacks, which increased general fears that foreigners pose a security threat, and ever-climbing unemployment figures. The result of the lower chamber defeat was long negotiations in the mediation committee of the lower house and the Bundesrat. Only direct talks between the chancellor, the minister of the interior, and the opposition finally made a compromise possible. The new law was passed in late June 2004 and will take effect in January 2005.
The new law is not what was envisioned. The core piece of the original immigration law was lost on the chopping block during the mediation process between the two houses of parliament. There will be no selection of economically attractive migrants according to a point system. Instead, the recruitment ban that was passed in 1973 will remain in effect (this legally binding decree bars active recruitment of foreign labor; exceptions for nurses, IT specialists, and seasonal agricultural workers are legally defined by another decree). Ambitious young people from other non-EU countries will still be unable take up permanent residence in Germany. Any advantage that the opposition parties, and along with them a majority of the German population, may expect as a result remains unclear.
Germany's new immigration law does provide for three new exceptions to the recruitment ban:
First, foreign students will be able to stay in the country for one year after graduating from a German university if they choose to search for employment in Germany.
Second, newly arriving top-ranking scientists and managers will receive the right to take up permanent residence (instead of being granted renewable temporary residence permits). German nationals and other EU citizens, however, will continue to enjoy preferential treatment during hiring processes.
Third, the new immigration law envisions that foreign self-employed individuals will be able to obtain a limited residence permit. This is provided, however, that in the view of the public authorities, there is an economic interest in their activities; that they invest at least one million euros in the venture; or that they create at least 10 new jobs. These entrepreneurs, however, will only obtain an unlimited residence permit after three years of residence. It is unclear whether or not this will be enough of an incentive to attract talent and capital. In the United States and Canada, these individuals receive permanent residence status from the beginning and may file for citizenship as early as three to five years after taking residence.
While inadequate in other respects, the law delivers at least one true improvement to the status quo. Refugees who are persecuted by non-governmental groups, or persecuted based on their sexual orientation, or who have reason to fear genital mutilation, until now were not entitled to seek asylum. The widely criticized, so-called "temporary exemption from deportation for non-deportable aliens" (which, so far, must be repeatedly renewed) will be eliminated. Unsuccessful asylum seekers who cannot be deported to their home countries due to the political situations there can now be issued a temporary residence permit. As a rule, such residence permits will be issued during the second year after the end of the asylum procedure.
In Germany, refugees who are recognized on the basis of the 1951 Geneva Convention relating to the Status of Refugees have been awarded only limited asylum to date. From the time the law takes effect, however, they will have the same status as refugees who are recognized under the more restrictive German asylum law. This will include access to the job market. Newly created special commissions will hear and decide cases of deportable aliens facing particular hardship in the event of an extradition. These commissions may suspend an order to leave the country and grant a temporary residence permit. Policy analysts have noted that several states are not happy with this interference in their decision-making authority. Others, on the other hand, are viewing this arrangement with relief.
The law also contains new provisions related to internal security. The expulsion not only of terror suspects, but also of persons preaching hatred, has been simplified. If deportation is not possible, authorities can restrict the freedom of movement of political and religious extremists and bar them from having contact with certain persons. In contrast, provisions for prolonged administrative detention on security grounds of non-deportable extremists (a measure vehemently demanded by the CDU/CSU) is not codified in the new law. Most experts agree that any extended administrative detention of this kind would violate the German Constitution.
The new law meets one essential requirement formulated by the Süssmuth Commission: the promotion of the integration of immigrants. From now on, all newly arriving immigrants are entitled to attend language and integration classes. To date, these courses have been open only to repatriated ethnic Germans from Eastern Europe and Central Asia, the so-called Aussiedler. These classes' estimated additional cost of 235 million euros annually will be borne entirely by the federal government. Only migrants without EU citizenship will be obligated to take language and integration classes. If they fail to attend, some of their social benefits may be denied. In extreme cases, their residence permits will not be renewed.
In sum, the new law has some strong points. It facilitates the deportation of political and religious extremists, while providing temporary residence rights to a large number of non-deportable asylum seekers who, so far, suffer from a precarious status and marginalization. It also provides better opportunities for immigrants who are willing to integrate, and ensures that others must, at a minimum, learn German. But the law squanders the chance to devise a pioneering new regulatory framework for pro-active migration policy that is urgently needed by Germany (and other European countries) given foreseable demographic challenges. It will be a while before Germany gets a second chance to draft a real immigration law.
Rainer Münz is a Senior Fellow of the Migration Research Group at the HWWA. In 2000-2001 he was a member of the Süssmuth Commission.
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