Australia to pay €555m over scrapped French submarine contract

Sydney (dpa) - Australia will pay hundreds of millions in compensation to French shipbuilder Naval Group in a bid to mend relations with Paris after tearing up a multi-billion-dollar submarine deal last year.

Australian Prime Minister Anthony Albanese announced Saturday that Canberra would pay €555 million ($583 million) in compensation.

Australia's former government, with the agreement of Albanese's party, scrapped a $66 billion submarine deal with France for conventional submarines and to create a joint security alliance with Britain and the United States.

The AUKUS alliance, aimed at countering China's power in the Indo-Pacific region, will give Australia access to US technology to build and operate nuclear submarines.

"The way that decision was handled has caused enormous tension in the relationship between Australia and France," Albanese said.

"France is 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 settlement will draw a line under the contracts, Albanese said, adding that some details would remain confidential.

He also said the agreement followed talks with French President Emmanuel Macron, who he thanked for "the cordial way in which we are re-establishing a better relationship between Australia and France."

Albanese has pledged to repair the Franco-Australian relationship and rebuild trust since he took office last month.

The decision to scrap the deal last year led to Macron calling Albanese's predecessor Scott Morrison a liar and Paris's envoy to Australia saying relations had hit an unprecedented low. the article content or add new blocks...