BERLIN - The German government on Wednesday agreed plans to reform immigration law, as Berlin seeks to open up the job market in Europe's biggest economy to much-needed workers from outside the European Union.

The government has said it wants to boost immigration and training to tackle a skills shortage weighing on the German economy at a time of weakening growth, and when an aging population is piling pressure on the public pension system.

The planned reforms to the Skilled Immigration Act, first introduced in March 2020, include an "opportunity card for jobseekers" based on a new points system which takes into account factors such as language skills, education and work experience and not just formal qualifications.

Unskilled workers are also to be given the opportunity to migrate to Germany if the Federal Employment Agency sees a need for them in certain sectors.

Interior Minister Nancy Faeser told reporters the reforms would amount to "the most modern law on immigration in Europe" after the cabinet signed off on the key points of the plan.

Draft legislation on the initiative, which has been broadly welcomed by industry, is not expected before the new year.

"We need people to help us maintain our prosperity in this country," said Rainer Dulger, president of the Confederation of German Employers' Associations (BDA), adding that without action companies are facing up to 7 million fewer available workers in the next few years.

There are labour shortages in a variety of sectors, from gastronomy and childcare to IT and renewable energies.

The coalition hopes to pair labour market incentives with eased rules for gaining German citizenship.

There have been misgivings over the plan from the three-way coalition's liberal junior partner and the conservative coalition, amid concerns the changes go too far or could even spur illegal migration.

Asked about the criticism, Labour Minister Hubertus Heil said: "Making qualified immigration to Germany possible is a path of economic common sense."

(Reporting by Holger Hansen and Rachel More; Editing by Madeline Chambers and Bernadette Baum)