Czech government doubles quota for Ukrainian workers

Lubomir Zaoralek, Minister for Foreign Affairs of the Czech Republic, addresses the 69th session of the United Nations General Assembly at the U.N. headquarters in New York, September 27, 2014. REUTERS/Ray Stubblebine

PRAGUE (Reuters) - The Czech government has decided to double its quota for Ukrainian workers, Foreign Minister Lubomir Zaoralek said on Wednesday, due to an acute labor shortage as the economy continues to grow strongly.

The Czech Republic has the lowest rate of unemployment in the European Union, and leading corporate lobby groups urged the government on Monday to relax rules for bringing in foreign workers, particularly from nearby Ukraine.

“We have approved broadening the program in Ukraine,” Zaoralek told a news conference, adding that the government now aimed to process around 7,600 work applications a year, twice as many as hitherto.

Manufacturing is a key driver of economic growth in the Czech Republic, with foreign-owned firms feeding into multinational supply chains in the auto, machinery and electronics industries.

Although unemployment in the country of 10.6 million rose by 0.1 percentage point to 5.3 percent in January, the number of job vacancies increased to 136,000, compared with 367,000 people out of work.

Labor costs are vastly cheaper in the Czech Republic than in neighboring Germany, with the average gross monthly wage at 27,220 crowns ($1,076.91) in the third quarter of last year.

Unions want higher salaries for workers and have opposed bringing in foreigners in larger numbers.

Ukraine, which is not in the EU, has been a favored source of migrant workers for the Czech Republic due to its geographical proximity and cultural and linguistic links.

Ukraine’s own economy has been badly damaged by a nearly three-year conflict in the east of the country with pro-Russian separatists as well as by endemic corruption and mismanagement.

Reporting by Robert Muller; Editing by Gareth Jones