Failed submarine deal: Australia compensates French company

Status: 06/11/2022 1:12 p.m

In the fall, a tangible rift between France and Australia was looming: the government in Canberra canceled a submarine deal in a bang. 555 million euros in compensation should now settle the dispute.

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

Prime Minister Anthony Albanese said the agreement would put an end to the deal. He spoke of a “fair and just agreement”. The agreement was preceded by talks with French President Emmanuel Macron. He thanked Macron for “the heartfelt way in which we are restoring a better relationship between Australia and France”.

Paris withdrew the ambassador

The current agreement was preceded by a rift between the two countries. Australia, the USA 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 is aimed at countering the military threat posed by China in the Indo-Pacific. In this context, Australia is to be given access to US technology for the construction and operation of nuclear submarines.

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

Albanese invokes cooperation

Things only calmed down when Albanese was elected Australia’s new prime minister in May. “The way this decision has been handled has created enormous tension in Australia-France relations,” Albanese said. “France is an important ally, an ally we have fought alongside in two world wars and an ally that has a significant presence in the Pacific.”

Since taking office last month, he had pledged to improve relations. 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, it said.

China is striving to include numerous Pacific island states in a security pact. A corresponding agreement between China and the Solomon Islands around 1000 kilometers off the Australian coast had caused concern in western countries

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