Australia has announced a huge compensation agreement with French submarine maker Naval Group on Saturday. This brings an end to a dispute which had been causing havoc in relations between Canberra, Paris and the French for almost a year.
Anthony Albanese, Australia’s new Prime Minster, says that France has reached a “fair settlement” worth EUR555 million to resolve the huge EUR56 billion contract breach. This was what sparked a diplomatic crisis in Canberra and Paris last fall.
France, through its Minister of Armed Forces, “takes notice” of this agreement.
Sebastien Lecornu, a Singaporean reporter, stated that the agreement was important because it would allow us to start a new chapter in our bilateral relationship and look forward.
Naval Group had previously welcomed, in a brief press release, a “fair” agreement using the term of an Australian head. However, the French company did not disclose any information about the compensation.
The group states that it has supported its French and Australian subcontractors and partners in their efforts. He also thanked those who supported the program “for more that 5 years”.
The French contract had been in preparation for ten year and was abruptly ended by Scott Morrison, the then-prime minister of Australia.
The head of government announced that the country would purchase nuclear-powered submarines from either the United States or Britain, a significant change in a country with limited nuclear capabilities.
Scott Morrison was then subject to the wrath French President Emmanuel Macron, who accused him deceiving and recalled his Australian Ambassador in protest.
The relations between the two countries were strained until the May election of Mr Albanese, a centre-left politician.
He has been quick to repair relations with New Zealand, France, and Pacific island countries that had blamed the Conservative government for their slow pace in dealing with climate change.
“We are working to restore a better relationship between Australia, France,” Mr. Albanese stated. He said he was looking forward to “responding to President Macron’s invitation for me to visit Paris at the first chance”.
The failure to fulfill the French submarine contract with Australia will cost taxpayers 2.4 billion dollars, according to their Prime Minister. They won’t have any benefits from it.
Australia’s defence strategy against China’s increasing influence in the region is centred around the submarine contract.
Australia could be more deterrent and stealthy with nuclear-powered submarines.
However, it is uncertain when Australia will be able purchase these devices.
It is unlikely that the first American or British submarine will be in service for many decades. This leaves Australia without a replacement for its fleet.
The selection of a supplier will have significant economic and strategic consequences, linking the Australian Navy with the nation chosen.
Peter Dutton, a former defense minister and opposition leader, stated this week that he has decided to source supplies from America. This is a surprising revelation considering the sensitive nature of ongoing negotiations.
Current government insists that no decision has been made.
