By The Financial District
Australia To Pay France Over €555-M Over Scrapped Sub Deal
Australia has announced a €555 million ($585 million; £475 million) settlement with France's Naval Group as restitution for sabotaging a submarine contract with Paris, BBC reported.
Photo Insert: French Defence Minister Sebastien Lecornu during a French Navy ceremony
Last year, Australia angered France by abruptly canceling a €35 billion deal to build a submarine fleet. Instead, it chose to construct eight nuclear-powered submarines using US and UK technology, known as the Aukus deal.
The agreement puts an end to a bitter dispute that threatened to derail EU-Australia trade talks.
Anthony Albanese, who became Australia's prime minister last month, said it was a "fair and an equitable settlement." He added that he would travel to France soon to "reset" a relationship beset by "pretty obvious" tensions.
French Defence Minister Sebastien Lecornu said the settlement "permits us to turn a page in our bilateral relations with Australia and look to the future."
Aukus is a security pact between Australia, the US and UK. It allows for greater sharing of intelligence, but crucially it gives Australia secret technology to build nuclear-powered submarines, though not equipped with nuclear weapons.
Aukus is widely seen as a response to the growing power of China, and an effort to counter its influence in the contested South China Sea.
Australia canceled a US$37 billion (A$52 billion; £27 billion; €35 billion) deal with a French company that builds diesel-powered submarines, and France, a traditional Western ally, learned about the new agreement only a few hours before it was made public.
The new agreement between Australia, the United States, and the United Kingdom will provide Canberra with the technology to build at least eight nuclear-powered submarines to counter China's influence in the disputed South China Sea.
The agreement will also cover artificial intelligence and other technologies, making it one of the countries' largest defense collaborations in decades, according to analysts. As a result, Australia will be only the seventh country in the world to operate nuclear-powered submarines.
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