Australia submarines: How the ‘contract of the century’ fell apart

File photo. (L-R) Australian Defence Minister Christopher Pyne, Australian Prime Minister Scott Morrisson and French Defence Minister Florence Parly shake hands after signing the Attack class submarine Strategic Partnership Agreement in Canberra, Australia, 11 February 2019. [EPA-EFE/LUKAS COCH]

Australia’s scrapping of a massive multi-billion-euro contract for the purchase of French submarines has led to a diplomatic crisis between France and its erstwhile allies in Canberra and Washington.

Here is a timeline of the spat:

‘Contract of the century’

On 20 December 2016 France and Australia sign what is dubbed a “contract of the century” that copperbottoms their alliance in the Pacific.

Under the deal France’s Naval Group, which is partly state owned, will build 12 conventionally powered submarines for Australia, based on France’s new Barracuda nuclear-powered subs, which are soon due to enter service.

The contract is worth Aus$50 billion ($36.5 billion, €31 billion) on its signing in 2016, but later revalued to €56 billion to take account of inflation over the length of the programme.

Under the accord the two countries are to cooperate over 50 years and the submarines be constructed in an Adelaide shipyard, with the delivery of the first sub slated for 2030.

The project is expected to create some 2,800 jobs in Australia, according to the Australian government.

Naval Group criticised

However Australia claims Naval Group are running behind schedule and over budget.

The group’s CEO Pierre Eric Pommellet goes to Adelaide for three weeks in February to take part in fraught negotiations.

On 2 June, Greg Moriarty, the top civil servant in Australia’s Department of Defence, sets alarm bells ringing in Paris after he raises the possibility of “alternatives” to the French deal because of ongoing difficulties.

Later in June, during a visit by Australian Prime Minister Scott Morrison to Paris, President Emmanuel Macron promises “full and complete” commitment to the deal.

As recently as 30 August, defence and foreign ministers from Australia and France “underline the importance of the Future Submarine programme”.

Contract ditched

Events take a dramatic turn on 15 September when Morrison announces that Australia will procure more silent nuclear-powered US submarines as part of a surprise new defence alliance — AUKUS — between Britain, Australia and Washington in the Indo-Pacific region.

Under the deal Australia will no longer buy the French submarines.

Furious France calls the U-turn “a stab in the back”.

The White House says its officials held high-level talks with Paris before announcing the deal, but France insists it was taken by surprise.

Paris recalls ambassadors

On 17 September Paris recalls its ambassadors to Canberra and Washington, an unprecedented act.

Foreign Minister Jean-Yves Le Drian calls the crisis “serious” saying “there has been lying, duplicity, a major breach of trust and contempt”.

Paris cancels a meeting planned this week between the French Defence Minister Florence Parly and her British counterpart Ben Wallace.

Morrison says the French government would have known Canberra had “deep and grave concerns” about French submarines.

EU officials back Paris

The European Union supports France on 20 September, with chief Ursula von der Leyen saying France has been treated in an “unacceptable” way.

A day later German Europe Minister Michael Roth says France’s diplomatic crisis with the US is a “wake-up call for all of us”.

He says the often divided EU must unite on foreign and security policy.

German Foreign Minister Heiko Maas says the decision “and the manner in which it was decided, was irritating and disappointing, and not only for France.”

However, a number of member states, including Germany, decline to support France over the row, advocating a more conciliatory approach.

Denmark sides with Biden in submarine row

Denmark, one of Washington’s closest allies in Europe, disagrees with French and EU criticism of the United States over a submarine deal with Australia, Prime Minister Mette Frederiksen said Wednesday (22 September).

Biden talks, Johnson snipes

US President Joe Biden and Macron hold phone talks Wednesday (22 September), with both agreeing that “open consultations among allies” could have avoided the crisis.

After the talks, Macron orders the French ambassador to return to the US next week.

But as Biden pledges support to Macron’s idea for stronger European defence to complement the NATO military alliance, British premier Boris Johnson pours fuel on the fire.

He tells France to “prenez un grip” in cod French during a visit to Washington, adding, “Donnez-moi un break” after Drian had accused Britain of “constant opportunism”.

(Edited by Georgi Gotev)

Subscribe to our newsletters

Subscribe