The new identification cards, set for use in 2010, will ease commerce for internet sales and make bank transfers and bureaucratic affairs run more smoothly. A digital fingerprint saved to the card will be optional, though a digital photo will be required for all German residents older than 16.
The cabinet also approved the hotly-debated citizenship test, a new component to citizenship applications which goes into effect this September.
The exam will cost applicants €25 ($38) a go, and they will be given all the questions to study beforehand. Candidates must correctly answer at least 17 of 33 questions on German culture and history to pass. Those exempted include people who have gone through the German school system, those younger than 16 and older people with failing learning capacities, according to the Interior Ministry. Successful applicants also have to have adequate German, no criminal record and have been living in Germany for at least eight years. Candidates can retake the test as many times as they like.
Critics of the exam have said the test is too difficult, with irrelevant questions that even Germans may not be able to answer, much less the country's 7 million permanent residents without citizenship.
Leaders from the country's Turkish community have been particularly critical of the test. At 2.3 million, Turks make up the largest group of immigrants in Germany, and have long pushed for the right to keep both Turkish and German passports. Around 340,000 people over 18 will soon face the tough decision of choosing between German or Turkish citizenship.
In 2000, Germany reformed its citizenship laws which had previously only recognized the principle of nationality by blood. The reform now allows foreigners who have lived in Germany for eight years to apply for naturalization. But the original plan to allow their children born in Germany to automatically become German failed in the face of fierce opposition by conservative parties. As a compromise, it was decided that naturalized children would have to decide at the age of 18 whether they wanted to keep their German passport or their foreign one.
Some point out that being forced to choose between nationalities could mean a conflict of identity and loyalties.