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The German cabinet has taken a small step toward relieving an acute shortage of medical and information technology workers that is hamstringing future growth of the country's med-tech sector.

Ministers last week agreed to lift restrictions on the immigration of highly qualified workers from 10 new member states of the European Union (EU), beginning in November if the cabinet's recommendations are approved by parliament in August. Restrictions also were eased for foreign applicants who demonstrate proficiency in speaking German.

In response to the accession of 10 European nations to the EU in 2004, Germany closed its labor markets while Britain, Ireland and Sweden opened access to these foreign workers. The German restrictions were imposed for a three-year period and then extended to 2009.

Meanwhile, the German medical technology sector, Europe's largest at 146 billion ($72.75 billion) in estimated annual sales, has pleaded with the Labor ministry for years to lighten the barriers to make up for the shortage of engineers needed to sustain growth (Medical Device Daily, April 30, 2008).

Verein Deutscher Ingenieure (VDI; D sseldorf), the German engineering association, in its annual med-tech survey reported that more than 30,000 job postings are going wanting in the sector due to a shortage of qualified personnel.

The Association of German Engineers says that there are 96,000 jobs available for information technology workers alone, twice as many as four years ago, according to Deutsche Welle, and in the IT sector every second company reports business is lower because vacant positions cannot be filled.

Executives responding to the VDI survey said the shortage is at a dramatically high level, and the German Industry Association for Optical, Medical and Mechatronical Technologies reports 64% of its members rate the lack of technical personnel as the top issue facing the German sector, ahead of global competition (32%) and costs and capital requirements (23%).

According to a study published by the economics ministry in June, the skills shortage in Germany will cost the country more than 120 billion ($31 billion) in 2008.

Under measures approved by the cabinet German employers, in order to hire a candidate from one of the newer member country, will no longer be required to prove there are no suitably qualified applicants from Germany or the original EU nations.

Restrictions will remain in place on less qualified workers from countries that joined the EU in 2004, such as the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia, and this restriction was even extended through 2011.

Business leaders welcomed the modest changes by the cabinet as a step in the right direction while saying they fall far short of recognizing the seriousness of the crisis.

The conditions spelled out by the cabinet require proof that a candidate is already earning a salary in excess of EUR 85,000 ($134,500) and are so highly qualified that they effectively are free to choose among opportunities more attractive than moving to Germany, such as English-speaking countries where they would encounter less cultural resistance.

Carola Feller of the German engineering federation, VDMA, said some of the eastern European countries that Germany is blocking actually have "a much better image than Germany" and recruitment efforts do not always appear especially attractive.

"The German labor market is only opening up for those who don't have to work in Germany," concluded an editorial in Deutsche Welle.

Olerup acquisition near close

LinkMed (Stockholm, Sweden), a private equity company in the life science sector, is completing the previously reported acquisition of biotech company Olerup (Stockholm, Sweden).

The acquisition is valued at SEK 216 million.

The transaction was conditional to approval by an extraordinary meeting of shareholders of LinkMed. The meeting was held on Tuesday, and shareholders voted to issue convertibles in LinkMed at a value of SEK 31 million.

According to LinkMed, the acquisition will further strengthen its position in the transplantation sector and is strategically important in that it complements LinkMed's portfolio company AbSorber and its XM-ONE product.

LinkMed said that in the long term, it will strive to build a larger company in the transplantation sector with a broad product portfolio.

Olerup SSP's products are used primarily prior to bone marrow transplantations.