SYDNEY: Australia unveiled a substantial compensation deal with French submarine maker Naval Group on Saturday, ending a contract dispute that soured relations between Canberra and Paris for almost a year.

Prime Minister Anthony Albanese said the French firm had agreed to a “fair and an equitable settlement” of 555 million euros ($584 million) for Australia ending a decade-old multi-billion-dollar submarine contract.

The agreement drew a line under a spat that caused leader-level recriminations and threatened to torpedo talks on an EU-Australia trade agreement.

“It permits us to turn a page in our bilateral relations with Australia and look to the future,” said French Defence Minister Sebastien Lecornu.

Albanese said he would travel to France soon to “reset” a relationship beset by “pretty obvious” tensions.

The tussle began in September 2021, when Australia’s then-prime minister Scott Morrison abruptly ripped up a long-standing contact with the French state-backed Naval to build a dozen diesel-powered submarines.

He also stunned Paris by revealing secret talks to buy US or British nuclear-powered submarines, a major shift for a country with little domestic nuclear capability.

The decision drew fury from French President Emmanuel Macron, who publicly accused Morrison of lying and recalled his ambassador from Australia in protest.

Relations were on ice until this May when Australia elected centre-left leader Albanese. Since coming to office, he has rushed to fix strained relations with France, New Zealand, and Pacific Island nations, who objected to the previous conservative government’s foot-dragging on climate change.

“We are re-establishing a better relationship between Australia and France,” Albanese said, after speaking to Macron about the settlement. “I’m looking forward to taking up President Macron’s invitation to me to visit Paris at the earliest opportunity.”

Published in Dawn,June 12th, 2022

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