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Tuesday, December 06, 2022

Failed submarine deal: Australia compensates French company

Failed submarine deal: Australia compensates French company

Status: 06/11/2022 1:12 PM

In the fall, a solid rift was brewing between France and Australia: the government in Canberra canceled a submarine deal in a blaze. The dispute should now be settled with a compensation of 555 million euros.

Australia and France are mending their recently strained relations. The government in Canberra has agreed to pay compensation to French shipbuilder Naval Group over a failed submarine deal. 555 million euros are to flow to the company so that it can breach a contract to purchase French submarines that have existed for years.

Prime Minister Anthony Albanese said the deal would end the deal. He spoke of a “fair and equitable settlement”. The deal was preceded by talks with French President Emmanuel Macron. He thanked Macron for “the way we are restoring better relations between Australia and France”.

Paris withdraws ambassador

The current agreement was preceded by a rift between the two countries. Australia, the United States and Great Britain announced a new joint security alliance in the Indo-Pacific in autumn 2021 without consulting their allies. According to security experts, the new alliance aims to counter the military threat posed by China in the Indo-Pacific. In this context, Australia is to be given access to US technology to build and operate nuclear submarines.

A 56 billion euro deal between France and Australia on submarines that was considered safe fell through as a result. Paris reacted angrily. Macron publicly accused the then Australian Prime Minister Scott Morrison of lying and even withdrew the French ambassador from Canberra.

Albanese calls for cooperation

Things calmed down when the Albanians were elected the new Prime Minister of Australia in May. “The way this decision has been handled has caused enormous tension in Australia-France relations,” Albanese said. “France is an important ally, an ally we have fought in two world wars and an ally that has a significant presence in the Pacific.”

He had vowed to mend ties since taking office last month. In a telephone call in May, Albanese and Macron agreed that they wanted to rebuild a trusting relationship between the two countries. For example, they wanted to overcome the climate crisis and the strategic challenges in the Indo-Pacific.

China is trying to include several Pacific island countries in the security agreement. A similar agreement between China and the Solomon Islands, about 1000 km off the Australian coast, had caused concern in Western countries.

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