Over the last week, you might have seen a lot of news about AUKUS and submarines, and what it means for Australia. Don’t know what AUKUS is? Click here. But we thought we should circle back to the deal that existed before AUKUS.
The deal with France
Malcolm Turnbull, Australia’s PM at the time, signed a deal with the French company Naval Group to design new submarines, known as the ‘Attack class’ in 2016. The $90 billion project was called the Future Submarine program, and largely consisted of an agreement to build 12 submarines. It was agreed the technology would be developed in France, and the majority of the construction would take place in Adelaide.
Between 2016 and 2021, numerous delays (from both sides of the transaction) resulted in cost blowouts. Remember that $90 billion price tag? It was originally $50 billion – a budget blowout equivalent to the GDP of Bahrain. It’s thought the budget was only set to grow further – earlier this year, Defence Secretary Greg Moriarty revealed tensions over the deal saying, “it became clear to me we were having challenges with the Attack class program over the last 12 to 15 months.”
Last week, Prime Minister Scott Morrison announced the cancellation of that deal, with the introduction of AUKUS.
How did France react to AUKUS?
France was not thrilled about the announcement, and began recalling its ambassadors to the U.S. and Australia. France’s Foreign Minister, Jean-Yves Le Drian, labelled Australia’s decision as “a stab in the back.” Prime Minister Morrison is reportedly still yet to speak to French President Emmanuel Macron after the announcement of AUKUS. Morrison commented on Australia’s current relationship with France saying, “our door is wide open, our invitation is there, we understand the hurt and the disappointment and we’ll be patient and we look forward to working with old friends again.”