Australia pays €555m over scrapped nuclear-sub programme

THE Australian Government has announced a €555m (US$579.9m) settlement with France’s majority state-owned Naval Group over the scrapped Attack-class submarine programme.

In September 2021, Australia announced a collaboration with the UK and US – AUKUS – for nuclear-powered submarines that effectively replaced an existing A$90bn (US$62.6bn) agreement with France, causing international tensions.

With news of the “fair and equitable settlement” to the naval defence company, the recently-elected Australian Prime Minister Anthony Albanese said that the “matter is resolved” and the nation can now move forward in its relationship with “important ally” France.

French Minister of Armed Forces Sébastien Lecornu expressed wishes that the settlement and change of Government will make it possible to overcome the crisis of confidence in Australia that arose last year.

AUKUS and the decision to scrap the agreement with France were announced by the previous Australian Liberal-National coalition Government voted out on 23 May. The now-in-power Labor Party accepted the decision to exit the deal, but Albanese acknowledged that the way it was handled “caused enormous tension” with France.

AUKUS

In April, Australia and the UK and US reaffirmed their commitment to AUKUS, and implementation of the programme had begun. It will provide Australia with nuclear-powered submarines, while upholding the highest non-proliferation standards, as well as advanced capabilities including artificial intelligence and autonomy, quantum technologies and advanced cyber capabilities.

By March 2023, the countries intend to determine the optimal pathway for Australia to achieve nuclear capability. According to reports, the collaboration will see Australia become the seventh nation with nuclear-powered submarines.

Initially it was announced that the programme would deliver at least eight nuclear-powered submarines to Australia, that would be built in Adelaide, with the first submarines expected by 2040. The Financial Times reports that former Australian PM Scott Morrison later seemed to “water down” the timeline and the amount of the project that would be built in Australia.

Correction

This article was edited on 5 July to correct the stated cost of the previous nuclear submarine agreement with France from A$90m (US$62.6m) to A$90bn.