Australia, France agree sub settlement

The Australian government and French submarine maker Naval Group have agreed on a settlement payment after a major submarine contract was suddenly terminated last year.

Australia's new Prime Minister Anthony Albanese announced the agreement, in which the state-controlled French company will receive A$830 million ($585 million) and bring an end to a bitter dispute.

In September, Australia's government, under former prime minister Scott Morrison, reneged on a longstanding deal with the French supplier for it to build 12 diesel-powered submarines, and switched to nuclear-powered submarines as part of the AUKUS trilateral security partnership formed with the United States and the United Kingdom. The decision caused a deep row between the allies and threatened to end trade agreement talks between the European Union and Australia, reported the BBC.

Albanese promised to resolve the disagreement after taking office last month. He said the announcement paves the way for the nations to put the spat behind them. He said he planned to accept an invitation from France's President Emmanuel Macron to meet and reset relations between the countries.

Resetting relations

"This is a fair and an equitable settlement which has been reached. It follows, as well, discussions that I've had with President Macron and I thank him for those discussions and the cordial way in which we are reestablishing a better relationship between Australia and France," Albanese said in a statement.

The Financial Times reported that Australia had already spent A$3.4 billion on the French project, which did not deliver any submarines and that Albanese described as an "extraordinary waste".

He said Morrison's administration would be remembered as "the most wasteful government in Australia's history since federation".

Commentators said Australia's move to join AUKUS was to strengthen alliances in the Indo-Pacific region. China said AUKUS displays the "Cold War mentality "of Australia, the US and the UK.

Agence France-Presse quoted France's Defense Minister Sebastien Lecornu as saying the contract settlement "permits us to turn a page in our bilateral relations with Australia and look to the future".