Australia Pays French Contractor $835 Million Over Scrapped Submarine Deal

The Australian government has agreed to pay $835 million to French submarine contractor Naval Group over the controversial cancelled contract to build 12 submarines.

Prime Minister Anthony Albanese announced the settlement on Saturday making it clear that the way the former Morrison government handled the cancellation of the $90 billion deal “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.

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The deal with France was scrapped in September last year, in lieu of Australia entering the AUKUS security alliance with the United States and the United Kingdom. Under the new deal Australia will acquire at least eight nuclear-propelled submarines and gain access to advanced technologies.

Hoping to amend the rift between Australia and France, Albanese said he was "looking forward to taking up President Macron's invitation to visit Paris at the earliest opportunity”.

"I see a personal meeting between myself and President Macron in France as being absolutely vital to resetting that relationship, which is an important one for Australia's national interests.

"The tensions between Australia and France, I think, have been pretty obvious and they go from the top — I intend to have an honest relationship with France and one that is based upon integrity and mutual respect," he said.

Albanese said the total amount spent by Australian taxpayers on the scrapped French submarine deal is now $3.4 billion, a saving from the $5.5 billion that Senate estimates was told would result from the program.

"But it still represents 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."

- PM Albanese

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