(BERLIN) - Germany decided on Wednesday to keep restricting free access to workers from new EU member states in eastern Europe until 2011, the labour ministry said.

The ruling "grand coalition" agreed however to slash red tape for highly qualified new EU citizens seeking work in Europe's biggest economy to fill yawning gaps in the job market.

In 2004, when the EU expanded to include 10 new members, mainly from eastern Europe, Germany was allowed to impose restrictions on the newcomers until 2011 at the latest.

In a move that put it at odds with almost all other EU countries, Berlin cited fears that a flood of cheap labour would put Germans out of work due to its geographic proximity to the new member states.

The German unemployment rate has since fallen from the double-digit range to 7.5 percent in June.

Meanwhile German businesses now complain of a chronic lack of highly trained workers such as engineers and computer programmers.

"Germany must take part in an international competition to attract bright minds," Labour Minister Olaf Scholz said.

From January 1, Germany will lower the minimum annual salary foreigners from the new EU states must earn in order to seek work in Germany to 63,600 euros (101,300 dollars) from 86,400 euros currently.

And they will no longer have to prove that they are not taking the job from a potential German applicant.

Foreign job seekers who earned diplomas in German schools abroad are to benefit from the same measures.

Meanwhile, farmers who depend on Polish workers to bring in the harvest "will be able to cover their seasonal worker needs," too, a ministry statement said.

Germany also planned to evaluate the validity of foreign diplomas and to improve conditions for integrating so-called "tolerated" immigrants into the country and its culture.

The labour ministry is expected to create an monthly index to measure the needs of Germany companies over the coming half year and adapt the granting of work vias accordingly.

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