Address to Konrad Adenauer Foundation

I'm delighted to be joined by adelegation from Australia here, and particularly want to acknowledge ourAmbassador-designate, Lynette Wood, who will be commencing formal dutiesshortly, my parliamentary colleagues from the German Parliament, delighted tosee you here.

Ladies and gentlemen, itis indeed an honour to be invited to speak at the Konrad Adenauer Foundationhere in Berlin and I'm very pleased to be back in Berlin again as ForeignMinister.

It is anexciting time for the Foundation, given the huge amount of policy work beingconducted at this very important point in the history of the European Union.

And I'm particularly pleased tohear that the Foundation will be setting up an office in Australia, and Icertainly encourage you to do so as soon as possible.

Yesterday, my parliamentary andministerial colleague, the Defence Minister of Australia Senator Marise Payneand I participated in the first German / Australian 2+2 ministerial dialoguewith our counterparts, Ministers Steinmeier and von der Leyen.

While this was an historicmilestone in our bilateral relationship - I understand the Germans do not holda 2+2 with any other country than Australia - it was evident from our deep andfrank and open discussions that we are two countries divided only by distance.

Vibrant democracies, committedto freedom, the rule of law, open market economies with a similar world viewand perspectives largely aligned. Ours is a friendship between two naturalpartners. So, let me expand on this in a broader context.

Ladies and gentlemen, afterthe end of the Cold War, it seemed, for a time, that the ancient battles oversovereignty and land borders in most parts of the world were more or lesssettled.

The trend of the times –typified by the advent and growth of the European Union – was towardscollaboration between nations, towards the respect for and application ofinternational law and away from conflict.

A key element of the safeguardagainst conflict was that nations would not use military force to changegeographic borders.

And that was essentially thecase until 2014 when Europeans experienced perhaps the most profound strategicshock in two decades.

The Russianannexation of Crimea, and its treatment of Ukraine, was an explicit rejectionof that principle and therefore represented an open challenge to the EuropeanUnion itself.

Then in 2015 another strategicshock struck European shores from the south with an unprecedented flow ofpeople from war-torn Syria and elsewhere in the Middle East, and North Africa.

In the space of twelve months,one million people flowed into Europe, placing huge pressures on the capacitiesof national governments and on European unity.

Protectionist and nationalistinstincts that had been slowly building across Europe for years suddenly founda cause through which to advance these agendas right into the heart of theEuropean Union.

A third strategic shock came thisyear in the form of Brexit – a democratic earthquake with consequencesthat are hard to fully comprehend and are likely to take years to play out.

Overlaying these three hugestrategic shocks is, of course, the terrible, unfolding, evolving threat ofterrorism – which has struck repeatedly and tragically on European soil, attimes in the centre of some of Europe's greatest cities.

It seems that, after sixtyyears, we have reached a crucial point in the European project.

None of these recent challengesdetract from the extraordinary benefits that have come from Europeanunity, particularly:

• theabsence of a major war, like those which tore apart this continent twice in the20th Century
• thestrong support Europe's own development and integration gives the internationalorder, international frameworks and international law
• andthe prosperity that has been gained through Europe's part in globalisation.

However, the pressures nowcoming to bear on the European Union have intensified and are extraordinarilycomplex.

Many people – sometimes evenmajorities of national populations – have been wondering whether the long arcof European integration has been worthwhile.

Some have questioned whether thesecurity and prosperity gained from this unique experiment in the pooling ofsovereignty has justified the social change and economic upheaval implicit inany project of this scale.

We've seen this with Brexit,but it's also expressed in opinion poll after poll across Europe – thefragmentation and polarisation of political power, the increased support givento nationalists or to those who offer populist solutions – whether they candeliver or not – to Europe's challenges.

Today, I'll talk aboutwhy it is vital that the European project continues tosucceed and remains resilient.

The fact is, all of us – thatis, all of us who live in the liberal democracies that were incubated andnurtured by the nations of Europe – have a stake in Europe'ssuccess.

While different Europeannations have played significant roles at different times throughout history –when we look at Europe today, it is without question that this continent is atthe heart of the Western evolution of liberal democracy.

Now, longstanding continuousdemocracies like Australia naturally want to see Europe continue to succeed,because we believe the fundamental political model and values that we share areintrinsically for the greater good.

We want to see this influencespread – not shrink.

However, when we look aroundthe world today, there are widespread signs of democracy in trouble.

As the 20th Centurydrew to a close, it was a reasonable bet that the long ideological battles overwhich socio-political model was best for the management of human affairs hadbeen settled.

Democracy had spread to countryafter country around the world, on every continent – a far cry from thepredominantly autocratic world a century earlier.

Marxism failed in the SovietUnion and the number of democracies thereafter proliferated. China's embrace offormal socialism seemed increasingly qualified by its greater desire to emergeas a market economy, particularly as it made its historic move into the WorldTrade Organization in 2001.

Yet the Global Financial Crisisin 2008 spurred a massive loss of faith in Western financial practices andinstitutions.

Jobs, investment and growthhave been hard to come by in many Western economies, sluggish at best, leadingto rising concerns about equality and opportunity.

The countries of the West –including the United States and European – have struggled with concerns aboutspiraling debt, the inability of governments to enact meaningful social andeconomic reform, the massive loss of jobs associated with major structuralchange, and so on – all of these factors have played into a narrative of lossof dynamism in the West.

The United States, a model ofdemocratic values and freedoms, finds its political system struck by partisan gridlock,although no-one should ever underestimate the capacity of the United States toreinvent and rejuvenate itself.

In some democracies, the votingpublic has lost faith in the political class and are turning to candidatesclaiming to be anti-establishment, the anti-politician.

People all around the world –including in the European Union and Australia – are feeling disenfranchisedfrom their own democracies.

Some havecome to think that the West's very freedoms now lie at the heart of some of ourmost complex challenges – the push for the open movement of people and multiculturalism,for example – and have left us vulnerable.

The perception that democracyis struggling creates doubts in the minds of the leaders of developingcountries when they look for inspiration about how to transform theirsocieties.

As China has grownexponentially in economic power and influence, the model of one-party rule,with an economy dominated by State-owned enterprises, seems a viablealternative.

In other parts of thedeveloping world, another model offering tantalising prospects to some istheocracy.

The emergence of non-stateactors like ISIL with its perverse attempts to impose a warped model of Islamon populations via caliphate is one example.

There is a possibility of moreauthoritarian Islamic governments, based on adherence to one rigid form ofthought, as opposed to our values of individual freedoms and freedom of speech,religious tolerance, secular institutions, open markets, and so on.

Much worse is the possibilityof criminally-run economies – narco-states, perhaps, or kleptocracies – corruptforms of governance that do much to enrich a tiny population of ruling elitesbut little for the vast majority.

Ladies and gentlemen, I believe inthe genius of democracy. None of the other alternatives offer the world anywherenear the benefit of the liberal democratic model. Churchill had it right.

None can provide lastingstability or prosperity, which, by the way, is why so many successful people insome developing countries and economies leave for the West and send theirchildren to our educational institutions.

In lastmonth's edition of Foreign Affairs, StanfordUniversity's Larry Diamond provides a cogent summary of why democracies aregood for us:

• theylook after the human rights of their citizens
• theydon't go to war with each other
• moreoften than not, they have more developed, stronger economies – which makes themmore stable, and prosperous.

Authoritarian regimes, on theother hand, are "inherently unstable".

Diamond points out that whilethe West has been struggling with a crisis of confidence in the strength andvitality of our democracies, authoritarian leaders have been making hay,exporting to other developing states their toolkits for repression, surveillance,conflict and destabilisation.

They are multipliers ofinstability.

The fact is, we need liberaldemocracies like Europe, the United States and Australia to not only besuccessful, but to be seen to be successful, so they are a positive model for others.

A global retreat of democracyand the inherent values of freedom and respect for human rights would havemajor strategic consequences for us all.

A global retreat of democracywould mean more instability, more conflict, less observance of fundamentalrights and less prosperity.

To ensure we reinvigorate globalsecurity and prosperity into the future, we must renew and refresh ourdemocracies, and our faith in democracy's transformative power.

This will mean strengthening ourinstitutions and safeguarding principles such as freedom of speech and the ruleof law.

And our democracies must befunctioning – there's much more to a functioning democracy than a vote.

Many authoritarianregimes hold "elections" and use the results to impose tyranny on groups withlesser power at the ballot box.

Future success lies, as italways has, in taking the hard decisions to make sure we remain the exemplar ofdevelopment globally - hard decisions, both socially, and economically.

First and foremost, we needpolicies that maintain trust in opensocieties.

We need to resist negativeimpulses towards isolationism andexclusion.

Australia recognises, forexample, the scale of the migration challenge facing Europe.

Maintaining orderly bordercontrol is critical to national sovereignty and cohesiveness – Australiabelieves that very strongly.

While ensuring we have secureborders, we must also remain open to the world.

Economically, we must resistthe new wave of protectionism we are seeing throughout the world.

It is concerning that thereis rising scepticism about the benefits of free and open trade and investment.

Australia's economyhas been built on open trade and foreign investment.

All economies benefit from anopen liberal trading and investment regime.

We need to work hard atbuilding understanding on this point. We need to work very hard.

Third, we all need to get ourfiscal houses in order.

Some countries in the EuropeanUnion, just like Australia, need to get their debt burdens under control.

This is critical not only forlong-term economic stability, but also to build confidence that democraticallyelected governments can find solutions and can lead with discipline for thebenefit of future generations.

Fourth, we have to re-emphasisethe importance of structural reform.

Lifting productivity andstimulating innovation will build confidence in the liberal democraticmodel.

Australia is facing thischallenge as much as many others, with productivity rates over the last decadeor so well below where we need them to be.

If we can unlock the privatesector engine of our economies, we will see economic gains that reinvigorateour societies.

Global growth is sluggish – afact that makes it harder to create jobs, to innovate and move into new emergingsectors, and drive a strong economy.

Last but not least,politically, we have to do one of the hardest things – we have to reform ourpolitical engagement to ensure we have the support of our populations.

Europe struggles from thisperhaps more than other parts of the world because the European Union is asuper-structure that has been built on top of national bodies and institutions,each with their own political history and democratic legitimacy.

If there are any early lessonsfrom Brexit – lessons relevant, not only in Europe, but also in Australia, inthe United States and around the world – surely it has to be that in ourefforts to develop our democracies, we have to bring the people with us.

Technocratic decision-makingand thought can only take us so far, and on its own, without advocacy, rationalargument, persuasion and leadership, it struggles to build true politicallegitimacy.

Ladies and gentlemen, PrimeMinister Malcolm Turnbull is famous – in Australia, at least! – for saying thatit has never been a more exciting time to be an Australian.

And he's right –our country is riding the wave of an economically positive quarter-century –enormously positive, with a record run of 25 consecutive years of economicgrowth, a high standard of living, and incomes and assets the envy of manyaround the world.

And we believe that we're asuperpower – a lifestyle superpower!

More broadly, the 21stCentury is also an exciting time to be living in a liberal democracy.

The system of liberal democracythat the countries of Europe and Australia share is the best, most successful long-term model for social and economic development –the political solution that offers the most to its citizens, in terms ofwealth, freedom and choice.

We must accept the reality that rightnow, on many fronts, it is under pressure.

It is in ourinterests and in the interest of billions of people in developing countries forus to ensure it is successful – because, as they say, nothing breeds successlike success.

For all its challenges, I wouldurge Europeans to reject talk of decline.

This is the world's largestsingle economic unit, a continuous source of ideas and creativity, and is thehome of unique model of sovereignty.

Europe must evolve in order toendure.

Ladies and gentlemen, I lookforward to working with you on the continuing project of strengthening Europe,Australia and the West more broadly and committing anew to nurturingsuccessful, prosperous liberal democracies for our collective future.

Thank you.