The submarine deal with France was scrapped when Australia joined the AUKUS, a trilateral security alliance, last September with the United States and United Kingdom. 'France, an important ally, an ally that we have a history of fighting alongside in two world wars and an ally that has a significant presence in the Pacific at a time when tension in the Indo-Pacific means that we need to work with our partners.” “The way that decision was handled has caused enormous tension in the relationship between Australia and France,' Albanese said. Morrison’s successor, Anthony Albanese, wants to reset relations with France at a time when China is expanding its trade and security ambitions in the Pacific.Īlbanese told reporters Saturday that the previous Australian government had badly mismanaged the submarine contract. France has accused Australia of “lies and treason.” Morrison said it would have been “negligent” to go ahead with the deal against advice from Australia’s intelligence agencies. In abandoning the deal, Australia said it wasn’t convinced the Attack Class, diesel-powered submarines it ordered from France were up to the job.

Macron also recalled France’s ambassador to Australia in protest. The French President Emmanuel Macron accused the former Australian Prime Minister Scott Morrison of lying in public about the agreement to build 12 diesel submarines that was worth US$63bn. Terminating the agreement also caused a deep diplomatic rift between Canberra and Paris. The compensation payout brings the total cost of scrapping the French submarine contract to Australian taxpayers to US$2.6bn. It was terminated after Australia last year signed a security alliance with the United States and Britain, which gave Canberra a huge defense upgrade. The Australian government will pay the French shipbuilder Naval Group US$558 million in compensation after a controversial decision to scrap a lucrative submarine contract.

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