Axed French sub deal to cost Australia close to €4 billion

Australia is to pay France compensation after backing out of a deal to buy submarines from Naval Group - a defence manufacturer, in which the French government is the majority shareholder.

French President Emmanuel Macron visits an Australian naval base in 2018.
French President Emmanuel Macron visits an Australian naval base in 2018. Australia is to reimburse France for backing out of a deal to buy French-made submarines. (Photo by ludovic MARIN / POOL / AFP) / POOL SOLELY FOR BEST IMAGE AND ABACA

Australia will be forced to pay up to €3.7 billion to exit a submarine deal with France in favour of acquiring nuclear-powered US or British models, officials admitted Friday.

Last year Australian Prime Minister Scott Morrison tore up a submarine deal with France’s Naval Group, instead opting for nuclear-powered alternatives as part of a landmark security agreement with Washington and London.

On Friday, under questioning from an opposition senator, defence officials revealed the scuppered French deal came with a hefty price tag.

“So taxpayers will be up for $5.5 billion [AUS $] in submarines that don’t exist?” senator Penny Wong asked at a hearing in Canberra.

“The final negotiated settlement will be within that price,” Defence Department deputy secretary Tony Dalton replied.

Dalton said the exact amount was still unclear as negotiations with Naval Group were ongoing.

Finance Minister Simon Birmingham defended the decision to ditch the French deal as “necessary for decades to come”.

“There’s no shying away from the fact that we knew there were serious consequences,” Birmingham said.

“The changed strategic environment in the region meant that the option that had previously been chosen was not going to meet the best needs for Australia in the future.”

Morrison previously said the decision to opt for nuclear-powered submarines was driven by changing dynamics in the Asia-Pacific region, where China is increasingly asserting its claims to almost the entire South China Sea.

The switch caused fury in Paris, with French President Emmanuel Macron accusing the Australian leader of lying about the future of the contract initially worth Aus $50 billion (€34 billion).

In December, a study released by the Australian Strategic Policy Institute said the nuclear-powered submarine programme would cost more than US $80 billion (€72 billion) and take decades to complete.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


French lawmakers push for abortion rights to be enshrined in constitution

After the seismic decision of the US Supreme Court on Friday, French MPs are calling for the right to abortion in France to be protected by the constitution.

French lawmakers push for abortion rights to be enshrined in constitution

Lawmakers from French President Emmanuel Macron’s Renaissance party are to propose a parliamentary bill on Saturday that would enshrine the right to abortion in the constitution. 

The move comes after the US Supreme Court overturned the landmark 1973 “Roe v. Wade” decision on Friday.

“In France we guarantee and advance the rights of women. We protect them,” said Aurore Bergé – the head of Renaissance in the Assemblée nationale and one of the key sponsors of the bill. 

Another co-sponsor, Marie-Pierre Rixain tweeted: “What happens in elsewhere cannot happen in France. We must protect the right to abortion for future generations. 

In 2018 and 2019, Emmanuel Macron’s party – which back then was known as La République en Marche – refused to back bills proposed by left-wing party, La France Insoumise, to enshrine abortion rights into the constitution. 

In a Saturday interview with France Inter, Bergé suggested that the success of Marine Le Pen’s Rassemblement National during parliamentary elections earlier this month had created a sense of newfound urgency. 

She described the far-right MPs as “fierce opponents of women’s access to abortion” and said it was important “to take no risk” in securing it. 

READ MORE France’s Macron condemns US abortion ruling

French Prime Minister Elisabeth Borne has come out in support of the bill. 

The left-wing opposition block, NUPES, also backs it and had planned to propose an identical piece legislation of its own on Monday. 

Macron is seeking parliamentary allies to pass reforms after his formation lost its majority in legislative elections earlier this month.

The legal timeframe to terminate a pregnancy in France was extended from 12 to 14 weeks in the last legislature.

Changing the constitution requires the National Assembly and Senate to adopt the same text, then a three-fifths majority of parliament sitting in congress. The other option is a referendum.