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Australia reaches settlement with France over scrapped submarine deal


French President Emmanuel Macron, and Malcolm Turnbull, former Prime Minister of Australia, stand at HMAS Waller (a Collins-class submarine that the Royal Australian Navy operates from Garden Island, Sydney, May 2, 2018).

Ludovic Marin | Afp | Getty Images

Australia’s Labor-led government reached a settlement of 555 million euros ($583.58million) over the controversial decision to cancel the French submarine agreement last year. Canberra is hopeful that this will repair the relationship between their two nations.

Australia cancelled last year a multibillion dollar order for submarines from French naval shipyard Naval Group, and instead opted for an alternate deal with the United States or Britain.

This move angered Paris, triggering a diplomatic crisis that was unprecedented. China, the largest rising power in Indo-Pacific has been angered by the move.

Australia Prime Minister Anthony Albanese announced on Saturday that his government has reached an “fair and equitable agreement” with Naval Group.

The cancellation last year of Canberra’s order for a new conventional submarine fleet with Naval Group – valued at $40 billion in 2016 and reckoned to cost much more today — came after the previous government signed a trilateral security partnership with the United States and Britain.

This trilateral agreement was to create a fleet nuclear-powered submarines using British and American technology. Albanese stated that the agreement would enable Australia to improve its relations with France.

Albanese stated in separate statements that “Given how serious the problems that we face globally, it’s essential that Australia and France once more unite to protect our common principles and interests.”

Australia, France, America, France, and their partners expressed concerns about China’s increasing influence over the Pacific region, which has historically been under US control. After China and Solomon Islands signed a security agreement earlier this year, their concerns grew.

Albanese declared that France has a role to play in Indo-Pacific and that he deeply values it. He said he would be happy to accept the French President Emmanuel Macron’s invitation to Paris.