Prime Minister Anthony Albanese said on Saturday that the French company had agreed to a “fair and equitable settlement” of 555 million euros ($ 584 million) for Australia, ending a 10-year multi-billion dollar submarine contract. The deal has thrown a line under a controversy that has sparked controversy at the leadership level and threatened to torpedo talks on a European Union-Australia trade deal. “It allows us to turn the page on our bilateral relations with Australia and look to the future,” said French Defense Minister Sebastien Lecornou. Albanese said he would travel to France soon to “restore” a relationship plagued by “quite obvious” tensions. The controversy began in September 2021, when then-Australian Prime Minister Scott Morrison abruptly broke a long-term contract with the French State Navy to build twelve diesel-powered submarines. It also surprised Paris by revealing secret talks on buying US or British nuclear submarines, a major change for a country with little domestic nuclear capability. The decision angered French President Emmanuel Macron, who publicly accused Morrison of lying and recalled his Australian ambassador in protest. Relations were on ice until May, when Australia elected the leader of the center-left Albanese. Since taking office, he has rushed to rectify strained relations with France, New Zealand and the nations of the Pacific Islands, which opposed the previous Conservative government for climate change. “We are restoring a better relationship between Australia and France,” Albanese said after speaking to Macron about the settlement. “I look forward to meeting President Macron’s invitation to me to visit Paris at the earliest opportunity.” Speaking on the sidelines of the Shangri-La Dialogue security summit in Singapore, Lecornu said France appreciated its “friendship” with Australia. “Just because a government has not kept its word in the past does not mean we have to forget our strategic relationship,” he said. “Australia has a new team in power, we are happy to work with it.” The submarine deal has been the focus of Australia’s race to develop its military capabilities, as it fears the threat of a more belligerent China under President Xi Jinping. In total, the failed contract for the French submarines will cost Australian taxpayers $ 2.4 billion, Albanese said, with almost nothing to show for it. Promising nuclear submarines are likely to cost billions more, but they would allow Australia to operate more covertly and – equipped with sophisticated cruise missile capabilities – be a much more deterrent to Beijing. However, there remains deep uncertainty about how quickly they can be built. The first American or British submarines will probably not be in the water for decades, leaving a large capacity gap as Australia’s existing fleet ages. The selection of the contractor will have a significant economic effect and strategic implications, closely combining the Australian Navy with that of the selected nation. Meanwhile, Albanese has also taken trial steps to hold the first ministerial-level talks with China in more than two years, following a series of bitter political and trade disputes. Defense Secretary Richard Marles told Singapore on Saturday that Australia wanted “respectful” relations with all countries in the region, adding: “This includes China.” “Australia values a productive relationship with China. China is not going anywhere. “And we all need to live together and, hopefully, prosper together.” Marles, however, dismissed a sharp question from a Chinese military official who asked if the so-called AUKUS agreement with the United States and the United Kingdom on the supply of submarine technology was a new defense alliance. “AUKUS is not a mini-NATO,” Marles said. “It is not an alliance.”
