CANBERRA – Australia unveiled a massive compensation deal with French submarine maker Naval Group Saturday, ending a contract dispute that soured relations between Canberra and Paris for almost a year, France24 reported Saturday.
Prime Minister Anthony Albanese said the French firm had agreed to a “fair and an equitable settlement” of 555 million euros ($584 million) for Australia ending a decade-old multi-billion-dollar submarine contract.
In September 2021, then-Australian Prime Minister Scott Morrison abruptly ripped up the French contract to build a dozen diesel-powered submarines.
He also stunned Paris by announcing a secret deal to buy US or British nuclear-powered submarines, a major shift for a country with little domestic nuclear capability.
The decision drew fury from French President Emmanuel Macron, who publicly accused Morrison of lying and recalled his ambassador from Australia in protest.
Relations were on ice until this May when Australia elected center-left leader Albanese.
Since coming to office, Albanese has rushed to fix strained relations with France, New Zealand and with Pacific Island nations, who objected to the previous conservative government’s foot dragging on climate change.
“We are re-establishing a better relationship between Australia and France,” Albanese said, after speaking to Marcon about the settlement.
“I’m looking forward to taking up President Macron’s invitation to me to visit Paris at the earliest opportunity,” he added.
The submarine contract had been the centerpiece of Australia’s race to develop its military capabilities.
In total the failed French submarine contract will have cost Australian taxpayers $2.4 billion, Albanese said, with almost nothing to show for it.
The promised nuclear-powered submarines are likely to give Australia the ability to operate more stealthily and — armed with sophisticated cruise missile capabilities.
But there remains deep uncertainty about how quickly they can be built.
