The DIW said immigration restrictions made it harder to enter Austria, Germany and Italy than Britain.
According to DIW analyst Herbert Bruecker the discrepancy occurs because DIW figures are calculated in a different way from other reports.
The tax cut will deepen its deficit by another 0.7% of GDP next year, according to DIW, a German research institute.
If anything, countries with more stringent immigration policies could be missing out on an influx of much needed professionals, the DIW report said.
DIW, a Berlin economics institute, some tax on distributed profit now shows up as income tax (paid by shareholders) instead of corporation tax.
DIW, one of Germany's major economic research institutes, on Thursday criticised the ECB for its failure to consider unemployment data in determining interest rates.
The DIW based its estimate on the number of immigrants arriving in the UK who had never visited or worked in Britain before, he explained.
DIW. Jobs in software, media and advertising are growing fast.
The figures from the DIW are lower than many other estimates, especially regarding the UK where government figures released earlier this month show that about 130, 000 nationals applied to work in Britain between May and December 2004.
By failing to follow the kind of tack followed by the US's Federal Reserve, which has continued to cut interest rates in response to economic slowdown, the ECB is blocking a sustained reduction in unemployment, the DIW said.
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