 Ladies and gentlemen, would you please be upstanding for Chancellor Merkel? Your Excellency Dr Angela Merkel, Chancellor of the Federal Republic of Germany. Frank Lowey, Chairman of the Lowey Institute and Board Members of the Lowey Institute. Your Excellency David Hurley, Governor of New South Wales. Former Prime Ministers Paul Keating and John Howard. Ministers, members and Senators, the Lord Mayor of Sydney, Ambassadors and Consuls General, distinguished guests, ladies and gentlemen. You might get a sense there was a lot of appetite for seats today. I'm Michael Fullylove, I'm the Executive Director of the Lowey Institute. This is the most important event in the Institute's calendar and we are delighted that you could join us for it. The Institute's mission is to bring international debates to Australia and to transmit Australian voices abroad. And it's been another busy year at the Institute. We've relaunched our flagship publication, the Lowey Institute Papers, now published by Penguin, which addressed the largest issues facing our country. We've published important reports on subjects including the minerals boom, Australia's provincial reflex, our defence challenges, our policies for the Pacific and the new leaders of China, Japan and Indonesia. Our researchers have provided expert analysis on the most urgent issues such as maritime tensions in Asia, the rise of Islamic State and the two Malaysian flights MH370 and MH17. And indeed, our board member Angus Houston, who is with us today, has represented our country very admirably on those issues. And we have hosted leading policymakers, including US Defence Secretary Chuck Hagel, the Mayor of London Boris Johnson and Nobel Peace Prize laureate Ong San Suu Kyi. All this work is enabled, of course, by our financial supporters, including our corporate and government members, the Supporters Circle, subscribers, grant providers and the Lowey family. We thank them all. Ladies and gentlemen, this month Australia is both the President of the UN Security Council and the President of the G20. We are a country with global interests and the Institute has led the debate on how Australia can use these global institutions to further our interests and values on how we can think big. And of course, it is the G20 that has brought us our 2014 Lowey lecturer. Over the years, the Lowey lecture has been delivered by a number of eminent Australians and visitors to Australia, including former Prime Minister John Howard, the editor of the Financial Times, Lionel Barber and the Executive Chairman of News Corporation, Rupert Murdoch. Today we are most honoured to host the Chancellor of the Federal Republic of Germany, Her Excellency Dr Angela Merkel. In fact, yes, thank you, please. In fact, Chancellor, when we announced you were giving this lecture, the tickets were all claimed in five minutes flat. All of us look forward to hearing your views on the great issues facing Europe and Asia. Ladies and gentlemen, allow me to call upon the Lowey Institute's founder and chairman, Mr Frank Lowey, to introduce the 2014 Lowey lecturer. In this room and indeed in this country, Frank Lowey needs little introduction. He is the Chairman of Westfield Corporation and Centre Group, the Chairman of Football Federation Australia, most importantly for me, the Chairman of the Lowey Institute. Frank is one of Australia's great philanthropists. It is impossible now to imagine the international policy landscape in Australia without the Lowey Institute, and the Lowey Institute would not exist without Frank. Ladies and gentlemen, Frank Lowey. Thank you, Michael. Distinguished guests, ladies and gentlemen, the Lowey Institute is an investment in ideas. A down payment on Australia's future today is more evident than our investment that our investment is paying off. It is my great pleasure to introduce the 2014 Lowey lecturer, the Chancellor of the Federal Republic of Germany, Angela Merkel. Madam Chancellor, it's an honour to have you here with us today to deliver your first public lecture in Australia. Ladies and gentlemen, Angela Merkel was elected as Chancellor of Germany in 2005. After 26 years in politics, she is the first former citizen of East Germany to lead the United Germany. Madam Chancellor, the Second World War had a profound effect on both of our lives. For you, it led to the partition and the reunification of your homeland. For me, as a Holocaust survivor, it was a reason for my immigration to Australia. I appreciate the leadership you have shown in rejecting racism and prejudice, especially anti-Semitism. Our respective Germany has reconciled itself with its history. Both of you in Germany are now seen as leader in Europe. You're on the biggest economy in Europe. Without your leadership during the death crisis, I believe Europe would have faltered. Australia and Germany have much in common. Our armed forces have served side by side. Both of our nations are committed to stopping the advance of Islamic State in the Middle East. We share common interest in peaceful and secure Europe. Madam Chancellor, you are one of the world's most influential leaders. You ensure that Germany's voice is heard loudly on the international scene. One mission of the Lowy Institute is to project Australian voices to the world. Another mission is to bring prominent international voices to the Australian audience. And Madam Chancellor, we are most excited to listen to you today. Ladies and gentlemen, please welcome Chancellor Merkel to the podium. Mr. Lowy, our governor, Mr. Hawke, Mr. Keating, Mr. Howard, ministers, excellencies, ladies and gentlemen, it is a great honor and privilege to be able to give here today the annual Lowy lecture and allow me to thank the Lowy Institute for international politics for the invitation that I very gladly accepted. It's true that G20 presidency actually brought me to your country, brought me to Australia. This is my first trip to this wonderful country. But I think I should say that many Germans preceded me. They came here to this country, fascinated by this huge country in the ocean. It attracts people enormously, also obviously, because it's seen from our vantage point on the other side of the globe, as you quite rightly put it down under. 163,000 Germans last year set out on the long road towards Australia. And let me say that I'm very pleased to see that so many young people use the opportunity to study at universities. They like to use the visa issued by your government on the basis of an agreement between our two governments in order to participate in the working holiday program. And I think that's a very, very good program indeed. Let me remind all of us of the geologists, buttonists, and geologists, Ludwig Leichhardt, who came from Brandenburg, and who already in the 40s of the 19th century in three expeditions explored the interior of the continent. Today's schools and streets in both Australia and in Germany are called, are named after him. And Sydney even has a part of its town that is named after him. So over many, many years, these bonds have been created between our countries. But I think one has to also be honest in saying some of those bonds also well bring us back into a terrible and harrowing chapter of our common history, of which we are reminded, particularly this year, where we remember 75 years after the outbreak of the Second World War, where we remember the break with civilization that was the Shoah, and also the outbreak of the First World War 100 years ago. And it is not by chance that particularly the First World War is called the seminal catastrophe of the 20th century. For many in Australia and New Zealand, this First World War became a bitter reality almost exactly 100 years ago. The first 30,000 soldiers left by ship on 38 ships to be more precise, from Albany to Alexandra in Egypt. And Prime Minister Abbott only a few days ago reminded all of us on the 1st of November in Albany of their fate. And in those battles against Germany or the Austrian-Hungarian Empire and the Ottoman Empire, tens of thousands of Australians perished on the Dardanelles. And the Western Front, more than 130 were wounded. Year after year, you mark under 25th of April Anzac Day, which brings back painful memories of the great losses incurred during the landing on Gallipoli. This is a very special day of commemoration. Ladies and gentlemen, how could we get to this point 100 years ago, to this point of strife between nations and peoples? And in looking back to the time leading up to the outbreak of the war in 1914, there's one thing that becomes very apparent, namely the lack of communication among the elites of almost all of the European states and the complete failure of diplomacy. There was a lack of suitable mechanisms and institutions to have exchange of views, to build trust. And to show a spirit of cooperation. There was no readiness to accept compromises, no willingness to settle differences peacefully, and also because of the arrogant assumption of military superiority. But the belief that modern wars could actually be limited in nature proved to be a fatal error. What was initially a regional crisis on the Balkan turned within just a few weeks into a conflagration gulfing the whole of the continent. What happened at the time cannot be made undone. But we can, and indeed I say we must, draw the right and the necessary conclusions from this. In 1914, national complacency and coal-blooded military logic brushed aside responsible politics and diplomacy. In 2014, however, we in Europe strived to forge a dialogue and poach settlements peacefully. May negotiations be ever so difficult. The 28 member states of the European Union today believe in the strength of economic, social, and political integration. We believe in the cohesive effect of a community of shared values and in institutions that are committed to the common European will. The heads of state and government of the 28 member states and their ministers have regular exchanges on virtually all topical issues. We see each other, we talk to one another, we know each other. This is how trust is built. And trust, I think we would all agree, is the most important prerequisite for a political cooperation in the spirit of mutual partnership. For quite some time now, the precarious balance of ever-changing alliances among states has been replaced by a European order of countries that believe in rule of law. And yet we have to see that in Europe, too, there are still forces that refuse to accept the concept of mutual respect and of settling conflicts with democratic and legal means, those that put the right of the stronger before the right of the strength of the law. And this is exactly what happened with the annexation of the Crimea. That is a clear violation of international law, and that was carried out by Russia at the beginning of this year. Russia, in this way, violates territorial integrity and the sovereignty of Ukraine as a state. A neighboring state is labeled and seen as part of a sphere of influence. After the horror of two world wars and the end of the Cold War, this calls the whole of the European peaceful order into question. And it is continued by Russia exerting its influence to destabilize eastern Ukraine in Donetsk and Luhansk. Let me remind all of you of Flight MH17, the Malaysian aircraft that was shot down. Many lives were lost among the victims. There are 38 citizens that residence from Australia and four Germans. It is true. This Ukrainian crisis is certainly not an exclusively regional matter. No, it affects all of us. Who would have thought that 25 years after the fall of the war, after the end of the Cold War, after the end of the division of Europe, and the end of the world being divided into two blocks, something like that can happen right at the heart of Europe? Oh, thinking, thinking in terms of theories of influence where international law is violated, this must not be allowed to prevail. And I'm convinced. It will not prevail. It will not prevail even though the road towards achieving that may be a long one, maybe an arduous one, and we may suffer setbacks along the way. The approach that the European Union and its partners are pursuing in order to overcome the crisis in Ukraine serves this goal. First, we support Ukraine both politically and economically. Secondly, we shall spare no effort to promote a diplomatic solution to the conflict in talks with Russia. And third, we impose economic sanctions against Russia to the extent that that is necessary and for as long as they are needed. The overriding goal of this approach is to preserve a sovereign and territorially intact Ukraine that is able and allowed to determine its own future. I'm very grateful that Australia is supporting us in this political approach. We have decided to adopt this approach, not least against the background of the lessons we learn from history. It took us centuries before the nations and the peoples of Europe found the possibility to come to closer economic cooperation and later on to closer political cooperation. The treaties of Rome that were signed and adopted 57 years ago are a clear illustration of this. This simply is a testimony to the conviction of the Europeans that European unification was a matter of war and peace and that it is indeed the guarantor and the crucial guarantor of us being able to hold our own, to promote and respect our values and our way of living and to do economics even in this globalized world of the 21st century. When all of those European countries speak with just one voice, this voice can be heard better than if they do this individually. And this is why they're trying, again, to forge a common approach and to make their voice heard. I always see in my global talks, in my global contacts, that there are great expectations as regards Europe. And we have to live up to those expectations. And how strong Europe is, in many ways, determines how convincing we can be on the international stage and how convincing we can defend our values of freedom, of rule of law, and democracy internationally. So I have to point out to you and admit that, economically speaking, these past few years were very difficult. They were characterized by the global financial economic crisis in the years 2008 and 2009, which see almost seamlessly into the European sudden debt crisis. We have been able now to put that crisis under control, basically, but we have not left it completely behind us. This means we have to stay the course, be consistent about this. And that means we need to consolidate our fiscal policies. We need to use freedom, the sort of leeway that we have in our budgets for targeted measures to boost growth. So we need to launch structural reforms in order to ensure more competitiveness. And for those countries that are united in the eurozone, economic coordination needs to be strengthened very significantly. So in a way, that was something that we did not do sufficiently when the euro was introduced. And we have to do this now. We have to correct this error. In the June of this year, the European Union, for the first time, agreed on a so-called strategic agenda that will be rolled out over the next five years. We concentrate here on the most important challenges that we face in the next few years to come. And we underline that the European level should not be duty-bound to look into each and every detail, but that we should concentrate our strength on what is most relevant, and we need to pull our resources. In trying to boost competitiveness, growth, and create employment, it will also always be important to turn this European economic and social model that combines economic success with social and also environmental responsibility into something that can be successful in the long run. That is a great challenge, particularly looking at the very strong global competition that we face. And we Europeans are more than aware of the fact that the world is not waiting for us. We see, if we look around us, that there are ever newer and ever stronger rivals resurfacing on global markets. Let us just look towards the Asian Pacific region, for example, here. The countries of that particular region have a share of almost 40% of the global economic output. A third of the exports globally come from this region, almost as much as from Europe. And their growth, with an average of 4.8%, is among the highest worldwide. China, India, Indonesia, among other parts of this region will have an ever more important position in the global division of labor. And obviously, they will throw their political weight around much more than in the past, for example, in the grouping of the G20. But Europe is not only very closely intertwined with Asia. We are economically speaking. We're also looking at the security developments in the Asia Pacific region. Let us only think of the nuclear program of North Korea and the territorial conflicts in the East and South China Sea. Asia is the only region in the world that has continuously increased its military expenditure ever since 1988. In 2013, military expenditure alone has increased by 3.6%. So apart from that, one also has to see that the political and economic development in the Asian Pacific region is not sort of taking a linear development, but simply because those countries and societies in this region are too different to heterogeneous in nature and their historical experience is so different. A road towards achieving open and pluralistic societies may be a very steep one, and it may be a very stony one, but it promises more stability long-term. And wherever Europe can help support countries traveling down this road, we were glad to do so. We can use the fora in which we already have a very close dialogue. We, the Europeans with the States of Asian Pacific region, for example, the ASEAN Regional Forum, the East Asian Summit, all the ASEAN Summit that was recently held in Milan. We are guided by the interest to see to it that this rise of the States of Asia happens peacefully and without any sort of sharp ruptures. ASEAN can play a central role here. This association of states has indeed pursued a policy of integration through, including economic programs and to fostering economic integration. And the aim is that the ASEAN Economic Cooperation and Association helps those countries among ASEAN that are economically weaker. And to pursue this, Germany and the European Union will support this development, freedom of trade, the perspective of a common market will bring states together. And this is something that we've seen in Europe and we've seen it in Europe ever since the European Cold and State Community was turned into the European Union. Obviously, we have very different histories. We have very different backgrounds, very different political and social foundations and experiences in ASEAN and the EU. So that does not overdo it with these comparisons. But ASEAN and the EU share a willingness to come to dialogue, cooperation and integration. And I think it will be of great benefit for smaller and larger partners to participate in multilateral processes. Essential experiences or inexperience of such processes is that bigger countries have to be ready to compromise. More of a spirit of compromise actually is expected from them. And transparency and a regular dialogue may well go a long way towards avoiding misunderstandings or conflicts because cooperating in multilateral processes and coming to agreements of the basis of international law will achieve that. Transparency, predictability and trust. And this can lead to possibilities of settling conflicts, for example, maritime territorial disputes here in the region. In order to come to lasting solutions, I think it's most important to use for us such as ASEAN and to overcome differences, for example, on the basis of maritime law. All sides are called upon to carry out confidence-building measures in order to avoid an escalation of, further escalation of matters that will then be unpredictable. This is not a purely bilateral or regional issues because after all, maritime routes are linking our region with your region. So this is why this affects us in Europe also quite directly. And we have joined interests looking to the stability in other regions. The geopolitical situation right now is highly critical, one in quite a number of parts of the world. I mentioned Ukraine, but we are also gravely concerned by the situation in Syria and in Iraq. The terrible disease of Ebola that currently afflicts broad swathes of West Africa and that is increasingly gaining a global dimension and can only be contained through international efforts and that's going to be quite a tour de force also has to be mentioned in this context and it has indeed been part and parcel of the G20 agenda. We must not leave those suffering people alone for humanitarian reasons but also because of a well-reasoned self-interest. Globalization is no longer merely an economic phenomenon. It has turned all of us into neighbors. More and more countries see themselves facing the same kind of challenges. And for Europe and Germany it's most important to have a partner in Australia here in this Asian Pacific region that shares the same values that we have. Universal human rights, basic rights, rights of freedom, democracy and rule of law. We have engaged in international missions together in the UN peacekeeping missions in Afghanistan or in missions to defend ourselves against the terror of IS in Iraq and in Syria. It is basically due to these steadfast efforts of Australia in the UN Security Council that even without the consent of the Syrian regimes, humanitarian goods for the suffering people in Syria could be delivered to the region. And it is also due to Australian efforts that the sanctions of the United Nations have been, could be implemented more effectively. In all of these questions, we consult very closely with each other and coordinate efforts also together with our transatlantic partners at the time. In 2012, for example, the then Secretary of State Clinton and then high representative of the European Union Ashton brought about a cooperation on foreign and security policy issues in the Asian Pacific region. We do all of that in the conviction that peace, freedom and stability are the basic precondition for cooperation in a spirit of partnership, political, economic and social progress can be achieved in this way, progress that is in the interest of all. This goes, for example, for common efforts to promote free trade, open markets and the same treatment of domestic and foreign companies as regards their competitive position. Pulling all of our efforts in order to bring about a solution to the issues of climate change is also important. If we do not put a break on climate change, it will have devastating consequences for all of us. There will be more storms, there will be more heat and catastrophes, more droughts, there will be a rising sea levels and increasing floods. Climate change knows no borders. It will not stop before the Pacific Islands and the whole of the international community here has to shoulder a responsibility to bring about a sustainable development. In the European Union, we have agreed upon a reduction of our greenhouse gas emissions until 2030 by at least 40% compared to the base year of 1990 and until 2030 we want to increase the share of renewables in our overall consumption to at least 27%. So we put on a very important marker in the run-up to the UN climate conference in Paris in 2015 for international climate protection. Our ambition is to come to an agreement that is binding for all states. Only in this way can global warming be actually limited to two degrees Celsius. So all countries are called upon to announce their national contributions for this world climate agreement until the first quarter of 2015 at the very latest. Only in this way we will be able to prepare the conference in Paris in an appropriate way and be able to achieve a substantial result. There are a lot of bombs that unite Australia and Germany. They are manifold, they are strong, but because we know that good things can always be improved upon. Prime Minister Abbott and I decided to set up a bilateral advisory group which we hope will give further impetus for our political, our economic and our social cooperation. So Germany and Australia, seen in this way, are much closer than perhaps looking at a global map may believe us to think. So let us use this closeness, let us use this partnership, let us use these very close bonds between us to the benefit of our nations and our peoples. Thank you very much for your attention. Well, Chancellor, thank you for a very rich and important lecture. You covered the field from Asia to the economy to climate to Ebola to the bilateral relationship between Australia and Germany. We have about 25 minutes or so for questions. I'm going to kick off with one and then I'm going to go to the audience and give people an opportunity to ask Chancellor Merkel a question. Chancellor, let me ask my first question on the first subject that you spoke of and that is the issue of Rutger. When the Berlin Wall fell, you were a physicist in East Berlin. Vladimir Putin was a KGB agent in Dresden. No Western leader knows Mr. Putin better than you and in fact we read in this morning's press that you had several hours of bilateral conversations with Mr. Putin in Brisbane. This is my question. How can we influence Mr. Putin? In the last few months, there's been a strong program of sanctions against Russia and yet, as you know, Russia has an endless capacity to suffer. This is German technology. Yeah, but take it away. Take it away. No, that's okay. So, Chancellor, when we were talking about Mr. Putin, no one knows Mr. Putin better than you. How do we influence Mr. Putin? Given that the sanctions seem only to have driven up his popularity, what is the best combination of carrots and sticks to influence Mr. Putin? Well, first of all, I think I should say that I did not know Mr. Putin when he was still active in the GDR, but we have made our acquaintance in the time after the German reunification. Secondly, I think what we basically need also in the 21st century in order to get to be successful politically, we need to have the necessary patience for an uphill battle. If one had, for example, said that well, this is now the situation, what, with Division of Germany, we have to accept that, then we would have made a great headway in the Cold War. I think you have to be patient, you have to believe that you are right with your policy, whether actually you have been right in choosing that particular policy is something that only history will tell later on. So we have this commemorative year. Germany basically concentrated on holding all of these commemorative events to talk about the past, and all of a sudden we see ourselves confronted with a conflict that, if you like, affects the very end. It seems to be an attack against the very heart of our values. So we can obviously not go on giving speeches of a commemorative nature. We have to prove that we've learned something from the past. And since you cannot make any safe predictions as to the future, it's not all that easy to find the right course of action while we know that you cannot and should not be too peaceful. You should take it seriously when somebody sort of fattens you or to keep a very close eye on the actions of others. And we know that even small conflicts may very well turn into bigger complications very quickly. So we drew the conclusion from the past that this conflict cannot be solved by military lean means because that would lead us into a conflict, a military conflict with Russia which would certainly not be limited in geographical nature. On the other hand, we cannot say because we cannot solve this militarily, we cannot solve it at all. So what sort of instruments do we have at our disposal? Well, we have economic strength and we're called upon to also then incur certain disadvantages to accept certain disadvantages for ourselves due to these sanctions. But I think economic might, economic power is one of the 40s that we have as Western nations and I think we ought to use this in itself. And the question now is how long do we have to wait for this to take some effect? My personal experience from the history of the German Democratic Republic is that one should not lose hope too quickly. There have been radio broadcasts telling us for 40 years that the GDR will not survive in the end but in the end even they had given up hope on the collapse of the GDR and when almost everyone had lost hope, it happened. And there were always some who always held faith. If you think, if you look at the quotations who in the 90s said what about the fall of the war or the fact that the war was very solid about the division of Germany what would happen, there were very few who later on were proofed by history. And well, if our popularity is increasing well then it increases. If we don't believe that our policies in the end will turn matters to the right cause then maybe we shouldn't give up on it but I have a feeling that the basic direction is the right one. The biggest danger is that we allow ourselves to be separate to be divided, that the wedge will be driven between us. So it was in Europe and in the world so it was so important for the US and Europe to pursue the same course for a very long time. This is not always easy keeping 28 states together or coming to decisions among those 28 states are quite often much, much slower than for example in American present in the decision making process or congress and the American present has always said clearly that we need to do this together and I think that's absolutely correct and we have to pursue this policy further. Thank you. Just a quick follow-up on that issue. How do you respond to those critics of the western policy who say that the west created Mr. Putin in a way by expanding eastward into the Russian sphere of influence? Well that's the question. After the end of the court war in Europe there are a possibility for people of a country to determine their own future what they want. If the majority of people in Ukraine were to decide that they want to be part of the Eurasian Economic Union with Russia, Kazakhstan and Belarus if they nobody in western Europe would have lost much sleep over starting a conflict with them with the European Union border and we would have said okay, if you so wish, do it but if on the other hand people in Ukraine decide and the majority decision to agree on an association agreement with the European Union well you're faced with the question should we tell them no you're not allowed to do that then because we all are heading for a lot of trouble we have to keep quiet about that and and quite frankly in 2008 I think during a NATO summit meeting in Bucharest I very clearly and forcefully spoke out against and this was against virtually all other NATO member states I spoke out against I mean the federal government not I personally but in my capacity spoke again spoke out against Ukraine getting a membership action plan therefore moving one step further to NATO membership because I said at the time and I would say again as regards NATO that that is a different kind of qualitative issue and at least we have to be very careful if you talk about a trade agreement or an association agreement with the European Union I think it is simply not acceptable to forbid a country its free decision it's difficult enough with NATO a number of people have a different opinion but on this issue it has to be possible on this trade association agreement now I don't think we should point accusatory fingers at us even President Yanukovych Russia friendly always tried to negotiate with the European Union this particular agreement if we accept that then we have to say while we are too weak we cannot accept further agreements of this kind we have to first ask Russia whether they are allowed to do that which was the situation 40-50 years for 40-50 years and I didn't want to come get back into that situation and this is not only Ukraine this is also about Moldova maybe even Serbia the Western Balkans the Baltics and this I think cannot be reconciled with our values it's not compatible Ladies and gentlemen we are going to take some questions from the audience there are low institute staff around the room with microphones I will indicate who has the call can I ask you to wait for the microphone can I ask you to tell the Chancellor your name and affiliation your question please help the Chancellor's interpreter by speaking clearly and please keep your question brief so that we can squeeze in as many questions as possible so please indicate by raising your hand if you would like to ask a question I saw Jim Spiegelman if you could just wait Jim for a microphone Jim Spiegelman I am on the Board of the Low Institute are you concerned by the drift of United Kingdom what will you see towards Europe and if so how do you see that developing well I hope that this drifting away will not happen let me say you're never well advised when you only listen to your concerns or your worries I'm doing everything I can in order to see to it that the UK remains a member of the European Union for very good German reasons what the British decide to do is something that they have to decide for themselves and they will certainly not listen to what others have to say on this but it is most important for us to have the United Kingdom in the Union because it's a country that is open to the rest of the world it's an innovative country towards the US and also to your region as the other continental Europeans and this is why we need Britain we need the United Kingdom so as not to forget the UK is helping us that we don't lose sight of what's happening in the rest of the world we continental Europeans sometimes think that if we only look at ourselves sort of on average we're that sufficient it's helping us not to see it in quite this way so I'll do everything I can and I hope that we will be able to persuade them to remain members of the European Union I mean so far I start from the assumption that they will remain in the Union you know that the British seem to tend towards very close kinds of votes as they had with the Scottish referendum we'll see how it goes over here yes sir Madam Chancellor, Nicholas Kearney from Herbert Smith Freehills Madam Chancellor you played a fundamental role in the European debt crisis over the last couple of years could you explain what lessons you think have been learned in the event that there is another crisis or there were to be another crisis in the coming years well one lesson we've learned is that we have to be careful that we are not too much in debt that's something incidentally that clearly came out of the T20 summit meeting that the European Union countries as a whole have a fairly high debt level if you look at the countries that share Western values including Japan for example the United States of America we have relatively high debt levels, Australia I think is doing much better there many developing countries or rather emerging economies are also doing better in this respect and if we look at the fact that many of us are aging societies have very clear demographic problems to contend with that exacerbates that particular effect we have to abide by those agreements that we have entered into in Europe on deficit criteria and bringing down the level of debt for too long we have pursued a policy where we allowed each and everyone to pursue their own economic policy but when you have one joint currency we have one ECB we have 18 different banks we have 18 different economic and fiscal policies and this will not go well in the end because after deciding on the common currency was also a decision for more integration you cannot allow one country to spend 2.9% on research and development and another one 3.5 there needs to be some consistency, some convergence if you have too much state expenditure in one country and not enough in another country in the end you will not bring this together there must not be a further drifting apart here there can be some leeway but not too much drifting apart in order to learn those lessons and then implement them while we still have a long way to go because national parliaments tend not to be all that enthusiastic about listening to recommendations from Brussels how to set your legislation but in the long run this is something that we have to accept and it is a lesson that we are currently having to learn then we made two qualitatively important steps one banking union all of the systemically relevant banks in Europe and now subordinate to the supervision of the ECB that was a gigantic step forward and the firewalls that against subordinate crises were made very high by giving guarantees to other countries that too was a clear illustration of our willingness to defend ourselves against pressures from the financial markets so that means that we are quite well equipped to deal with those issues in the future but let us assume to do all this in the end we still have to see to it that it's not the slowest country in this group that actually sets the pace because we have to look at global competition Australia will sign a free trade agreement with China that's a huge thing today then TPP the negotiations there are making enormous progress we look at the very long drawn out and arduous process on the negotiations of TTIP the transatlantic trade agreement looking at what you're doing here encourages me even more to speed this up because otherwise we will simply be cut off from the developments in the rest of the world Chancellor just on that issue of China you have taken a personal interest of course in Germany's relations with China and here in Australia we spend a lot of time asking ourselves what does China want from your experience with Chinese leaders what do you think Chinese leaders want in terms of a regional and global role for their country I think China very clearly has the ambition to actually go back to 2000 years of a successful history they were used to for more than 1,800 years have the largest share of global growth in history and now from a Chinese vantage point they add 200 week years and the current Chinese leadership sees itself in a great continuity not to look at the last 200 years but at the period before that where they were so successful and China will do everything to get back to this formal schedule you have to grant them that they have been able to overcome huge disparities and poverty in the country if you think of how people lived there in really dire states in very difficult circumstances and now are quite prosperous at least living the standard of a middle class and that's an enormous population we have very interest in seeing China stable it's a nuclear power it has a huge population and it will obviously because there will be prosperity there will be a very attractive market step by step China will also become more active in which for example so far they have participated always securing trade routes basically that they are interested in China looks at countries also smaller countries with quite a degree of respect I mean the Chinese present will not only come to Australia he will also go to Fiji islands and that shows that also in Africa also in combating the Ebola crisis so step by step they want to become an international player global player and the Chinese American relationship also is of tremendous importance in this respect so we'll see in the end to what extent China is actually capable of gaining respect and affection by the others in the region I mean if you look at Vietnam Malaysia Philippines and others in the region you see that they are looking with somewhat wary eyes on these emissions and China will have to solve this conflict in such a way that the ambition that they themselves have to come to a harmonious kind of coexistence that they will live up to their own ambition in dealing with their neighbors the Chinese present has very clear ideas about the ties that he wishes to forge in the context of the continental Silk Road and the maritime Silk Road very interesting the way that they think there's ought to be this kind of arc uniting them with Europe they were also very active in working for the survival of Europe because they're interested in multilateralism with its currency will gradually becoming competitive globally so we talked about the quota reform for example in the IMF the question to what extent the share of the emerging economies will increase the American Congress for years has not been able to decide this and this leads simply to a situation and it's actually similar to the question of the replenishment of the capital base of the World Bank this leads to a situation where these countries where China is in a position that Shanghai group is a brick project of having their own development bank and we from the vantage point of the western countries and here I see Australia and Germany as partners in this endeavor we have a very great interest in not seeing ourselves confronted by a totally fractured global community but to see that these alliances, these groupings that have proved themselves over the years that they are to be continued and very concerned about these parallel developments that are happening here The next hand I saw was here Yes, Madam Good morning Chancellor thank you very much indeed I should say first I'm Jillian Triggs the President of the Australian Human Rights Commission thank you for putting the rule of law and democracy and human rights really at the center of much of your speech I wonder if you could tell us a little about how you see investment and business at the global level being employed to promote human rights thank you so there are good aspects and there are difficult aspects about this obviously we talked about sanctions right now with Russia we talked about the question we can also talk about the question of human rights in other parts of the world I think trade exchanges can really create openness you get to know each other you change something in the country that you trade with so per definition that country becomes more open it needs to become more open it needs to address the interests of other cultures and civilizations and I think that's conducive to fostering respect for human rights certain cases of human rights all of a sudden become known insulated now if you don't trade you don't know who is actually imprisoned there for example one of the drivers of German unity has been that there have always been or was that there were journalists there were human rights organizations that were interested in what happened actually to the dissenters and activists in the German Democratic Republic so trade openness is always good but then obviously certain countries quite often if you're only talking about human rights all the time then you're not also the favorite trading partner that's what some people may think but I think that is something that we mustn't allow ourselves to sort of be played off against those interests we mustn't allow a situation where those who address human rights more often are played off against those who don't so that there's a if you like that's a task we have also as members of the European Union it's always very good when you're strong economically speaking and when you're not too dependent economically speaking on somebody else if in the end globally you depend on the whole of the financial community and the financial markets for giving you credit because you have such a high seven debt level you are no longer independent I always am then under the influence and I cannot always think that others will sort of be friendly and accommodating whenever you incur debts you have to understand that then you'll be holding to somebody else speaking of playing off other states against each other can I ask you about the western attempts to prevent Iran from gaining a nuclear weapon how confident are you that international solidarity can be maintained in such a way? I think that we've achieved quite a lot here particularly also because the United States of America have been very stringent in their approach to it and very consistent but it's true we have great difficulties for example to persuade China and Russia to follow suit and after all the effect will only be felt once the UN Security Council is taking a decision and Russia and China are in on this and it's not in the Chinese interest something we've addressed continuously with them for Iran to get a nuclear weapon this is why the Korean talks the talks with North Korea are so much supported by China this is why there are the Iran negotiations with China it's important because the bigger the share of China in the global GDP the more ineffective sanctions will be in which China is not participating one has to say that Chancellor I'm going to ask you one final question if I may you may remember candidate Barack Obama visiting Berlin in 2008 and one of the things he said then through progress requires allies who will listen to each other it turns out that in the case of Germany the national security agency took his comment literally as you found out how should western countries strike a balance between on the one hand collecting the intelligence that guarantees our security and on the other hand not engaging in overzealousness that damages important relationships with friends Australia is among the group of 5Is a somewhat privileged partnership of cooperation but Germany too has obviously very close contacts with the American intelligence community or the intelligence services of the 5Is countries we need this cooperation and all of the events surrounding the snowden case have taught us that there are different appreciations or different attitudes towards to what extent one ought to collect data I think that has a lot to do with how individual countries see basically this rapport between security that needs to be guaranteed by the state and individual personal freedom maybe somewhat different in the states than it is in Germany in Britain maybe different from how we look at this matter in Germany that's something we have to accept there is also however a domestic debate in the states about this issue there's one thing I don't share one view I don't share is a disagreement here with the United States I think that the political class in Berlin if I may say so doesn't need to be monitored by intelligence services in order to find out what they're actually thinking just go for dinner with them go for lunch with them or read the papers and you know 99.9% of what they actually think so I thought that this was quite a futile kind of exercise and if I see that in the states people tell us it's always nice to know the negotiating position of a partner one day before the negotiation I'm not able to survive without this because I think if you know each other well all of these things are fairly predictable so I think it's wrong to actually concentrate too much on certain things that you can't find somewhere else and then cause this level of irritation on the other hand let me state very clearly that a promoter cannot be ensured without cooperation with international intelligence services because terrorism after all is not fiction it is a very real and we cannot sort of defend ourselves against this without cooperation with the services and this is why the United States of America is and remains the most important partner to us Chancellor we could listen to you all morning but we know you have other appointments it's been a treat for us to hear you speak today I owe you a personal thank you for the great work you've done in technology that you gave me at the beginning thank you ladies and gentlemen it is said that Henry I don't know whether it was a test about my physical capability I was a theoretical physicist it's just another advantage of having a scientist who goes into politics Chancellor ladies and gentlemen it's said that Henry Kissinger once asked in frustration if I want to call Europe who do I call I would say that if you want to call Europe call Angela Merkel ladies and gentlemen thank you for joining us today we look forward to seeing you at Bly Street soon let me put a personal thank you into all my colleagues who've worked so hard over many months to put this on we are a small organisation with large ambitions this is a big event for us and I thank my colleagues for pulling it off with such a plumb but most importantly Chancellor on behalf of my chairman Frank Lowey and everybody here thank you very much very warmly indeed for delivering the 2014 Lowey lecture and for taking our questions Duncan Schoen ladies and gentlemen can I ask you to remain in your seats until the Chancellor and her delegation have left the room and one of my colleagues will come up to tell you what to do next thank you very much