When their daughter Seyma was born shortly before dawn on New Year's Day, Mesut and Saliha Kurt were elated that the timing of her arrival provided an extra reason to celebrate.

As Turks living in Germany, the couple never managed to acquire citizenship even though Mesut was born and raised here. But thanks to Saliha's delivery just three hours after a new nationality law took effect, Seyma automatically became a German citizen even though there is not a drop of German blood in her veins.

"These babies born today won't experience what I went through," said Cem Ozdemir, a Greens party legislator and the first ethnic Turk elected to the German Parliament. "They won't grow up here as foreigners. They will grow up as citizens, and it will change the future of the country."

Until this year, Germany maintained some of the strictest nationality laws in the world--based largely on a 1913 imperial decree that emphasized the primacy of ancestry over birthplace. But after a protracted and emotional debate, Parliament last year recognized the country's transformation into a multicultural society and made it easier for 7 million foreigners to secure a German passport.

"Some people still refuse to admit it, but Germany has become a colorful land with many cultures," said Marieluise Beck, the federal commissioner for foreign residents. "That's why it's nice these children finally have the possibility to say they are part of this country from the moment of their birth."

The new law reduces the required residency of new citizens from 15 to eight years. But the biggest change grants dual citizenship to foreign children born in Germany, as long as at least one of their parents has been living here for eight years. By age 23, the children must decide whether to keep German citizenship or that of their parents.

The status enjoyed by Seyma reflects a determination by the government to find ways to integrate a segment of the population that, until now, has been largely trapped between two cultures--alienated from both the homeland of their parents and the Germany in which they are raised.

But it also stems from Germany's demographic predicament. With one of the world's lowest birthrates, it has become dependent on younger foreign workers to sustain an aging population and the country's generous system of social benefits.

Already, one out of five Germans is past retirement age. Within 50 years, according to current trends, half the population will work to support the other half. A forthcoming U.N. report says that for the next 25 years Germany would need 500,000 immigrants a year to maintain its 82 million inhabitants at their present living standards.

Germany is not the only European country suffering from a native population implosion. The U.N. report says Italy, which has the world's oldest population and lowest reproductive rate, will require another 300,000 immigrants annually for the next 25 years. For the 15 countries of the European Union as a whole, at least 150 million immigrants may be needed by 2025 to fill jobs and maintain current levels of tax revenues.

But given the hostility to increased immigration in many parts of Europe--fanned by fears that more jobs would be lost to foreigners willing to accept low wages--Germany and other countries appear to be following a two-track policy: imposing strict limits on immigration while trying harder to integrate those foreigners who already have arrived.

After years of absorbing asylum seekers, refugees and other foreigners, Germany has started to experience a net population outflow. In 1998, for example, 606,000 foreigners came to Germany while 639,000 people left.

The rising number of departures is attributed in part to the repatriation of refugees who settled in Germany during the 1991-1995 wars in Bosnia and Croatia. But it also reflects a growing disenchantment with life in Germany and a desire among many Turks and older immigrants who have built up enough of a nest egg to return to their native lands.

The first surge in Turkish immigration to Germany came in the 1950s and 1960s, when the German government encouraged hundreds of thousands of Turks to move here because of a severe labor shortage.

"Many of them long ago gave up on the idea of ever becoming German," Ozdemir said. "They still consider themselves as foreigners even though they have been here for 30 years. And they still do not want to break their ties to the culture of their forefathers."

In recent weeks, Turkish newspapers in Germany have been urging people not to apply for German citizenship. They warn that by sacrificing their Turkish passport--as they would be required to do under the German law--Turks would surrender their rights to be buried in Turkey, or to operate a business or inherit property there.

While anxiety about giving up a Turkish passport has caused many older immigrants to balk at becoming German citizens--an estimated 40 percent of Germany's 2.2 million Turks are eligible but say they have no intention of applying--young people have shown no hesitation.

"We're backed up with about 40,000 applications for citizenship in Berlin alone, with the vast majority of them being young people," said Isabelle Kalbitzer, an immigration official with the city government. She said the largest number were Turks, followed by Iranians, former Yugoslavs, Egyptians and Vietnamese.

Foreigners in Europe

A recently passed law makes it easier for foreigners born in Germany to acquire citizenship. Although Germany remains among those European countries with the highest percentage of foreigners, more foreigners left last year than arrived. Experts believe this could indicate a new trend.

U.N. demographers predict that European countries, plagued with negative birthrates, will need many immigrants in the next 25 years to keep the population at 1995 levels.

Number of immigrants needed:

European Union 35 million

Germany 15 million

Italy 9 million

France 2 million

If European Union nations want to keep the current ratio of retirees to workers, they would have to import 150 million immigrants by 2025.

SOURCES: Organization for Cooperation and Development, United Nations