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Australia compensates Naval Group for breach of contract

Australia on Saturday unveiled a massive compensation deal with French submarine maker Naval Group, to end a financial and diplomatic dispute, with France now hoping to open a new page in relations between Paris and Canberra.

Australia’s new Prime Minister Anthony Albanese says the French firm has agreed to a “fair and equitable settlement” of €555 million for breaking a massive €56 billion contract that sparked a diplomatic crisis between Paris and Canberra last fall.

France, through the Minister of the Armed Forces, “takes note” of this agreement. “This agreement is important because it will allow us to open a new page in our bilateral relationship with Australia and to look forward,” Sébastien Lecornu told journalists in Singapore, where the forum is being held. on defense and security in the Asia-Pacific Shangri-La Dialogue.

The minister was due to meet his Australian counterpart Richard Marles, from the newly elected Australian Labor government, on the sidelines of the forum on Saturday.

A little earlier, Naval Group had welcomed a “fair” agreement, using the term of the head of the Australian government. The group, majority owned by the state, specifies that it has “supported” its French and Australian partners and subcontractors in their efforts.

For the CFDT union, the first union organization at Naval Group, “it’s rather good news that it ends fairly quickly, rather than going into litigation which could last for years”, according to David Robin, central union representative in Cherbourg. (Sleeve). Since the breach of the contract, “we have bounced back well” and “we also do not despair of having another export contract as we had for Brazil, India, Malaysia”, he said. told AFP.

In September 2021, then Australian Prime Minister Scott Morrison suddenly ended the French contract that had been in preparation for ten years.

French submarines: Australia compensates Naval Group for breach of contract

The head of government announced that his country would buy American or British nuclear-powered submarines, a major change for a country with weak nuclear capabilities.

Mr. Morrison then drew the wrath of French President Emmanuel Macron. Relations between the two countries remained frosty until the election in May of centre-left Mr Albanese.

He has rushed to mend strained relations with France, New Zealand and Pacific island nations who blamed the previous Conservative government for its slow pace on climate change.

Mr Albanese said he would soon travel to France to ‘reset’ the relationship.

Speaking on the sidelines of the Shangri-La Dialogue forum, Lecornu said France appreciated its “friendship” with Australia. “It is not because a government in history has broken its word that we must forget our strategic relationship”, underlined Mr. Lecornu.

– Master piece –

In total, the failure of the French submarine contract will have cost 2.4 billion dollars to Australian taxpayers, said their Prime Minister.

French submarines: Australia compensates Naval Group for breach of contract

The submarine contract is the centerpiece of Australia’s defense strategy against China’s growing influence in the region under Xi Jinping’s presidency.

Nuclear-powered submarines could allow Australia to operate more stealthily and deterrently from China.

But there is great uncertainty about when Australia will actually be able to own these devices. The first American or British submarine is unlikely to be in service for decades.

Former defense minister and current opposition leader Peter Dutton said this week he had decided to source supplies from the United States, an unusual revelation given the sensitivity of the ongoing negotiations.

The current government has insisted that no decision has yet been made.

– “Not an alliance” –

At the same time, Mr. Albanese took steps to resume dialogue at ministerial level with China.

French submarines: Australia compensates Naval Group for breach of contract

Australian Defense Minister Richard Marles said in Singapore on Saturday that Australia wants to have “respectful” relations with all countries in the region, adding: “That includes China.”

“Australia values ​​a productive relationship with China. China is not going to leave, and we all need to live together and hopefully prosper together,” he said.

Asked by a Chinese military official whether the so-called AUKUS agreement with the United States and Britain for the supply of submarine technology was a new defense alliance, Mr Marles claimed that the “AUKUS is not a mini-NATO”.

“It’s not an alliance,” he added.

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