Writing in the Walloon (i.e. Belgian-French) business newspaper L’Écho, in a piece somewhat sarcastically entitled The euro, our Savior, Marc Lambrechts makes a brief macroeconomic survey of the current European scene and comes up with a couple paradoxes. It looks like everybody is feeling better now about the business conditions, as surveys carried out within the Eurozone among both businessmen and consumers show. But this might be nothing more than spring-fever; Lambrechts prepares us for the shock that first-quarter 2010 economic reports are going to bring, showing a marked slowing-down then (e.g. German GDP drop of 0.4%) caused mainly by the severe winter weather and the sharp drop in auto-sales from the expiry of all those national “cash-for-clunkers” purchase-subsidy schemes.

Surely recovery will come about eventually, although with regard to Europe generally economists at the OECD are not optimistic about that happening until the second half of this year. One way for Germany to expedite that for itself, though (since the Germans earn so much from exports), is to get the euro to fall in value against the other major world-currencies – a process to which nothing has contributed more lately than the continuing confusion in the financial markets over Greece’s fiscal problems, which German obstinacy and tight-fistedness at the EU level has only prolonged. “A curious paradox,” Lambrechts calls this.

UPDATE: Strangely, the performance-vs.-confidence balance seems to be reversed in the US, as per this article from the New York Times.

One of the latest developments on the European economic front – during what are otherwise these dog days of a European summer, when most everyone is off on vacation – is the recent announcement that British Airways and the Spanish carrier Iberia have begun discussions about an eventual merger. Featured in that FT piece was this quote from BA chief executive Willie Walsh: “The combined balance sheet, anticipated synergies and network fit between the airlines make a merger an attractive proposition, particularly in the current economic environment.” “Synergies”; “network fit”: I guess one doesn’t get to be CEO of a major international airline like BA without being able to tick the necessary B-school jargon boxes, but what is all that really supposed to mean?

That is what Patrick Anspach, writing in the Belgian paper L’Echo, would also like to know (Do the Air-Mergers Make Any Sense?). We can know what Walsh means when he says “in the current economic environment,” at least: that mainly refers to the ever-climbing (until recently) price for jet fuel that is turning profit-making routes into loss-makers for airlines the world over. And a merger does seem to be a popular thing to do these days, as in the US Delta and Northwest as well as Continental and United have taken recent steps towards union or at least greater cooperation.

But does the latter strategy really produce a solution to the former problem? Or, as Anspach puts it, “is it really useful to throw yourself in to the arms of your neighbor when you are in free-fall?” He thinks not; greater size is not the answer to the current ailments seriously afflicting the airlines. Those “synergies”? They don’t add up to much when two airlines merge, other than getting rid of redundancies where the two companies were engaged in doing the same thing. For the already-announced Delta-Northwest merger, for example, that adds up to savings of only $1 billion, when the two airlines’ combined turnover amounts to some $35 billion. Is that enough of a savings to make the move worthwhile, i.e. to ensure that the combined company will have a greater chance of survival in Walsh’s “current economic environment”?

No, according to Anspach the way to endure rather lies in a company remaining flexible enough to adapt and change the way it has to change to succeed under the new conditions. After all, he reminds us, it wasn’t the dinosaurs that survived back in pre-history.