Australia to pay compensation to French submarine contractor

Australian Prime Minister Anthony Albanese has said that the Australian government will pay the French Naval Group shipbuilder compensation worth 555 million euro for breaking the contract for the construction of submarines.

The former Australian government, led by Scott Morrison, abandoned a project to supply 12 submarines worth €56 billion from France, according to Russia’s Prime news agency.

New Australian prime minister Albanese expressed confidence that he could normalise relations with the French leadership, which had spoilt after the refusal from the French submarines.

“As part of the settlement, Australia will pay Naval Group 555 million euro, which is equal to approximately 830 million Australian dollars,” Albanese said in his speech, the video footage of which went viral on his social networks.

Albanese noted that it is a "fair and equitable settlement".

Australia struck a defence and security deal with the UK and the US within the new AUKUS partnership and announced its refusal of the submarine agreement with the French Naval Group in mid-September 2021.

Afterward, French President Emmanuel Macron said that the Australian government "took bad actions", while French Foreign Minister Jean-Yves Le Drian called Australia's decision to break the agreement "a stab in the back".