Australia agrees payout to end France submarine spat

Australia has announced it will pay a substantial amount of compensation to the French shipbuilder Naval Group following Canberra’s controversial decision to scrap a submarine contract with France which soured relations between the two countries for almost a year.

Australia's new Prime Minister Anthony Albanese made the announcement on Saturday, saying the French firm had agreed to a “fair and an equitable settlement” of 555 million euros ($584 million) for Australia ending a 10-year-old multibillion-dollar submarine contract.

Albanese further noted that the previous Australian government had badly mismanaged the submarine contract.

“The way that decision was handled has caused enormous tension in the relationship between Australia and France," he said.

Albanese went on to say that he would travel to France soon to “reset” a relationship beset by “pretty obvious” tensions.

“I’m looking forward to taking up President Macron’s invitation to me to visit Paris at the earliest opportunity,” he said, adding, “I intend to have an honest relationship with France and one that is based upon integrity and mutual respect."

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Speaking on the sidelines of the Shangri-La Dialogue security summit in Singapore, French Defense Minister Sebastien Lecornu said France valued its “friendship” with Australia.

“Just because a government in the past did not keep its word, it does not mean we have to forget our strategic relationship,” he said. “Australia has a new team in power, we are happy to be able to work with them.”

He said the latest decision will permit us “to turn a page in our bilateral relations with Australia and look to the future.”

In September 2021, the United States, Britain, and Australia established a security alliance – dubbed AUKUS – for the Indo-Pacific to protect what they called their shared interests and help Australia acquire American nuclear-powered submarines.

The security pact effectively scuttled a previous $66 billion deal between France and Australia that was signed to supply French-designed conventional diesel-electric submarines to the Australians.

After Australia cancelled the lucrative deal, Paris recalled its ambassadors from Washington and Canberra, claiming that France had been "stabbed in the back."

France recalls ambassadors to US, Australia over snubbed submarine deal

France has recalled its ambassadors to the US and Australia over the snubbed submarine deal.

French President Emmanuel Macron also publicly accused Australia’s then Prime Minister Scott Morrison of out-rightly lying to him over the submarine deal.

Morrison rejected the accusations of having lied to France, saying he had raised concerns over the deal "some months ago.”

The trilateral security pact has been widely seen as an attempt to counter the so-called growing military assertiveness of China in the Indo-Pacific region. Beijing has been quick to condemn the initiative as “extremely irresponsible” and a threat to regional peace and stability.

Many observers warned that the trilateral pact could lead to a situation very similar to the US-Russia arms race during the Cold War.

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