AUKUS: Australia pays $830m penalty to France over botched submarine deal

The Australian government will pay €550m (A$830m) towards a settlement with France’s Naval Group over the former Morrison government’s highly controversial decision to scrap the French attack class submarine project as it joined hands with US and UK under AUKUS pact.

The Australian prime minister, Anthony Albanese, om Saturday announced that the confidential settlement “would draw a line under the cancelled $90bn project”. Labor had given bipartisan support to the AUKUS partnership that had replaced the project with France. Under the  new partnership US and the UK have extended help to Australia towards acquiring at least eight nuclear-propelled submarines and cooperation among nations on other advanced technologies.

Albanese had stressed on Saturday that the manner in which the whole situation was handled by the former Morrison government “has caused enormous tension in the relationship between Australia and France”.

“This is a fair and an equitable settlement which has been reached. It follows, as well, discussions that I’ve had with President [Emmanuel] Macron and I thank him for those discussions and the cordial way in which we are re-establishing a better relationship between Australia and France,” he said.

“Valued friendship” between France and Australia

The settlement has been welcomed by the French defense minister later on Saturday. “It permits us to turn a page in our bilateral relations with Australia and look to the future,” French defense minister Sebastien Lecornu said. Speaking while attending the Shangri-La Dialogue security summit in Singapore, Lecornu said “France valued its friendship with Australia”.

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“Just because a government in the past did not keep its word, it does not mean we have to forget our strategic relationship,” he said. “Australia has a new team in power, we are happy to be able to work with them.”

“The total cost of the failed submarine project for Australian taxpayers is $3.4bn, which is down from the $5.5bn touted as the government’s total approved budget for the project”, as reported by The Guardian. But despite the low cost, Albanese said it was still “an extraordinary waste from a government that was always big on announcement but not good on delivery, and from a government that will be remembered as the most wasteful government in Australia’s history since federation”.