$835m sub settlement: a waste, or price of trust?

The Australian Prime Minister’s announcement that $835 million would be paid to France in the wake of the scuttled submarine contract is an important step to mending a vital but strained relationship.

However, Flinders University senior lecturer in history Dr Romain Fathi says considerable follow up efforts will be needed to convince France that Australia can once again be trusted.

‘This settlement is a good honest first step taken to mend the Australian-French relationship, brought to the ground by the Morrison government in September last year when it axed the $90 billion contract with French company Naval Group to build Australia’s next generation of submarines,’ Dr Fathi says.

‘While Australia had every right to walk away from the contract, the way it was done, in parallel to secret AUKUS negotiations, was a blow to French President Emmanuel Macron who thought Australia was an honest and transparent nation.

‘Since then, the relationship between Australia and France has been very tense, and President Macron explained that he would wait for a change of leadership or of government in Australia to re-engage with the Commonwealth.

‘Mr Albanese has been quick to act, announcing after only three weeks in office that Australia would pay a $835-million settlement to Naval Group.

‘The Prime Minister acknowledged the real waste of money he inherited from the previous government, and asserted that this settlement is an occasion to “draw a line under this issue” but I would be more measured: the French foreign office has a long memory and it will take the Albanese Government other goodwill moves toward France to demonstrate that his government, as opposed to the previous one, is a trustworthy partner,’ Dr Fathi says.

Dr Fathi says more than a one-off announcement is required.

‘Australia’s foreign policy with France will also need to demonstrate stability and mutual respect well into the future, perhaps even beyond the life of the Albanese Government, to re-establish a close and mutually beneficial connection between the two nations.

‘The Australian-French relationship isn’t about submarines only. It is also about geopolitics to work toward a stable Indo-Pacific region. Furthermore, France is a gateway for Australian trade to Europe, so it is in Australia’s national interest to re-set the relationship.

‘It takes courage to acknowledge that Australia acted poorly toward a long-term ally, and that it is now time to rebuild that relationship with France. This act of contrition was expected in Paris, and Albanese had the intelligence of delivering it publicly,’ Dr Fathi says.

‘It must be said, however, that the Albanese Government is not finalising this settlement with Naval Group from the goodness of its heart: that payment is a contractual obligation as part of Australia’s exiting the French submarines contract, and a payment for work already done by the French company.

‘This announcement demonstrates that the newly elected Prime minister is working hard on repairing the many diplomatic blunders made by the Morrison government, mistakes that have clearly isolated Australia in the region and the world.

‘The last three weeks have been very busy for Australia’s foreign policy, and we now see a government attempting to re-engage in multilateralism and the fostering of partnership,’ Dr Fathi concluded.

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