The scariest chart in yesterday’s Capital Economics conference showed how unit wage costs have moved since the establishment of the euro in 1999. The line for Germany is almost flat, while those for Greece, Portugal, Spain, Ireland and Italy have risen in step to stand around 40% higher than a decade ago.

No surprise, then, to hear Jonathan Loynes conclude that major sovereign defaults are inevitable, and that the euro cannot survive in its current form. His boss, Roger Bootle, was as cheerfully gloomy as ever, pointing out that there is life after default for countries. Contrary to conventional wisdom, he pointed out, a country which has recently defaulted is quite a good prospect for new loans, since those are the ones it is most likely to pay back. Commission-hungry bankers were swarming all over Argentina within weeks of it defaulting.

The biggest threat to the main body of the euro, he concluded, was not default and devaluation itself, but the sight of such measures actually working and producing growth in the Greek economy. It’s at that point the “austerity fatigued” countries which had struggled to stay in the single currency would wonder whether the sacrifices were worth while. Or, as he nearly concluded:

Do not be so sad and glum,

There’s bound to be far worse to come.