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Australia reaches settlement with French firm to ease ‘Aukus’ tensions

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The UK, US and Australia are set to hold talks on new members joining the AUKUS defence and security pact, according to reports.
The UK, US and Australia are set to hold talks on new members joining the AUKUS defence and security pact, according to reports.

Australia has reached a settlement with France’s Naval Group, as compensation for scuppering a submarine contract with the country.

The €555m (£475m) arrangement draws a line under a bitter dispute between both countries, after Australia angered France last year by abruptly cancelling a €35bn (£30bn) deal to build a fleet of submarines.

Instead, it opted to build at least new eight nuclear-powered submarines with US and UK technology – as part of the so-called Aukus deal.

Aukus is a security pact between Australia, US and UK, which allows for greater intelligence sharing.

It is widely seen as a counter to the growing power of China, and an effort to reduce its influence in the South China Sea.

Anthony Albanese, who became Australia’s prime minister last month, described the deal as a “fair and an equitable settlement”.

He added that he would travel to France soon to “reset” a relationship beset by “pretty obvious” tensions.

The settlement will also be a relief to the European Union (EU), with France threatening to to torpedo EU-Australia talks unless an agreement was made over the submarines.