According to the OECD, Spain's labor costs have dropped almost 5% percent from 2009 to 2012.

CNN: Auto industry revs up recovery on Spain

Ford, Renault and Volkswagen have all decided to expand production in Spain because of cheaper labor costs.

CNN: Auto industry revs up recovery on Spain

If the troubled labor markets of Latvia, Spain and Ireland want to see their economies recover, they should look to Norway for guidance, suggests Scarpetta.

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Also, some companies fear that it's too hard to fire French workers when things get tough and are instead eyeing countries like Spain, which has recently overhauled its labor rules and can offer some of the same advantages as France.

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Despite a slow start, there is now a clear track record of policy action in Spain which encompasses not only fiscal consolidation but also labor market and pension reforms as well as recapitalization of the weak parts of the banking sector.

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He suggests countries like Spain and Ireland should try and ape the so-called active labor market intervention used by Norway, in which the state funds not only unemployment benefits but also training and job searches.

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Frank Torres, director general of Nissan Motor Iberica, told CNN lowering labor costs were an achievement for Nissan Barcelona and for Spain itself -- making it an increasingly competitive location for manufacturing and exporting cars.

CNN: Auto industry revs up recovery on Spain

One result of ignoring these recommendations is increasing unit labor costs in Italy, while they are falling in countries like Spain and Greece.

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