As a result Daimler- Benz which had originally been predicting a healthy profit in 1995 is now talking of severe losses of DM1bn upwards

As a result, Daimler- Benz, which had originally been predicting a healthy profit in 1995, is now talking of severe losses of DM1bn upwards for the year.But, despite the dark news from Stuttgart - matched by an unsurprising plunge in Daimler-Benz's share price - it would be wrong to take all the pessimism at face value Gloom-and-doom scenarios are a part of German economic life The economy is always about to be shipwrecked And yet, the ultimate disaster always seems to be avoided. On past form, at least, German industry always finds the strength, in the end, to adapt and survive.Germany looks constantly to the rising Asian economies, and (rightly) fears for its own international competitiveness. Within Europe, however, its dominant position remains unchallenged - however much some German analyses seek to dodge that obvious truth.One sign of the underlying national self-confidence - despite all the mumbling and grumbling - is the popular fear of European currency union, which is now becoming increasingly clear. Opinion polls suggest that almost two-thirds of all Germans are opposed to a single currency - not least because they fear that their beloved mark would be weakened.

Nor is industry, traditionally more sympathetic, necessarily raring to go. Hans-Peter Stihl, president of the German Association of Chambers of Commerce, recently warned against racing ahead too fast towards currency union, insisting: "The latest turbulence on the currency markets showed that the introduction of a common currency will take longer than previously planned."In short: steady as she goes. Germany no longer seeks to be so different from everybody else. It is just as corrupt, not astonishingly efficient, and (most shocking of all) not even wildly pro-European.. When Tony Blair rose to address the News Corporation conference early this morning in Hayman, off the coast of Australia, he shared the podium with a man more powerful than he is. Mr Blair may be but a step away from Downing Street, but Rupert Murdoch is on his way to becoming the world's leading media mogul: a film-maker, a television broadcaster, and a newspaper and book publisher, not only through the traditional routes but along the information superhighway as well. He wields a different kind of power from politicians, for his is the power of communications technology and the marketplace, a combination wholly characteristic of the Nineties The reason lies in the very nature of Mr Murdoch's business.

Information is fast becoming the most significant economic sector globally: trade in goods and services is giving way to trade in information as the driving force of growth, and it is the creators, packagers and distributors of "knowledge-based" goods that stand poised to reap huge rewards. They wield a power, moreover, that does not easily yield to government action. At the turn of the century, anti-trust legislation could work in one country: national governments could regulate national economies This no longer applies. Companies in the information sector, such as News Corporation, are carving out an economic space that transcends borders. Like other multinational companies, their reference points are not nation- state governments, national economies, discrete national markets, but rather a space where the currency is information and the marketplace is the whole world.Governments have connived to make Mr Murdoch's rise possible, even if it is communications technology that has fuelled his company's growth.

Liberalisation of markets on a global scale, and the political revolutions of Thatcherism and Reaganism, removed impediments such as powerful labour unions and competition from state-owned corporations. Mr Murdoch knows that it now makes less difference to his plans whether Labour forms the next government, just as having Bill Clinton in the White House rather than George Bush or Ronald Reagan has done little to stymie the expansion of multinational companies. The Department of Justice in the US might be able to stop Microsoft from buying a software house, as it managed to do earlier this year. But this is simply a nuisance, rather than a fundamental obstacle.It is no great surprise that Mr Blair accepted Mr Murdoch's invitation. News Corporation's huge stable of media interests, particularly its five national titles in Britain, give it considerable influence. And while the Sun may not really be able to make prime ministers, it can certainly influence the outcome of elections. But does Mr Murdoch need Mr Blair?He would certainly have been listening with interest as Mr Blair spelt out the principles underlying Labour's policy on the information superhighway, which will be launched today: diversity of content; plurality of ownership; regional strength; quality of programme-making; and the avoidance of excessive dominance by any one company.

Mr Blair calls for choice and diversity, an open and competitive media market, adding: "though the special place that the media has in the dissemination of information means there is a need, of course, for a proper framework of rules".In other words, governments may yet cause trouble for media moguls such as Mr Murdoch. In many jurisdictions, the laisser-faire ethos that prevailed in the Eighties is giving way to a renewed emphasis on competition policy. Proposed media cross-ownership rules in the UK, for example, directly target his huge empire, threatening to cap his growth.Mr Murdoch recently had a scare in the US, where for a while it looked as if the Federal Communications Commission might force him to restructure his extensive American media holdings. The European Commission is working on new proposals to regulate the market for media and information, already expressing concern about the dominance of very large media companies.The sheer size of Mr Murdoch's holdings makes many distinctly uncomfortable. In an age of electronic communication, is it right that so much information is derived from a single source, or that culture is uprooted, uncoupled from the community and reinterpreted by the corporation?The new challenges that Mr Murdoch faces go further than shifting political ideology, however: creating a true, global information highway will require that new markets be opened, and while technology and corporate power togetherforce the pace of change, only governments can turn the key.For an American citizen like Mr Murdoch, with an Australian-based company, it makes sense, therefore, to forge close links with politicians in his overseas markets.