breach of ‘deal of the century’ will cost Australia up to 3.7 billion euros
Australia will be forced to pay up to 5.5 billion Australian dollars (3.7 billion euros), to end an agreement with France on the supply of submarines, in favor of the acquisition of nuclear-powered American or British models, officials admitted on Friday 1er April.
Last year, Australian Prime Minister Scott Morrison terminated a contract with the French group Naval Group for the acquisition of conventionally powered (diesel) submarines, opting for nuclear-powered alternatives as part of a historic security agreement with Washington and London.
Questioned by an opposition senator, defense officials revealed that abandoning the French accord came with a high price. “So taxpayers will have to shell out $5.5 billion for submarines that don’t exist? »asked Senator Penny Wong during a hearing in Canberra. “The final negotiated settlement will be within this price”, replied the deputy secretary of the Ministry of Defense, Tony Dalton. He also clarified that the exact amount was not yet known because negotiations with Naval Group were underway.
A program far from being operational
Finance Minister Simon Birmingham defended the decision to abandon the French deal as “needed for decades to come”. “It has to be admitted that we knew the consequences would be significant”said Mr. Birmingham.
Mr Morrison previously said the decision to opt for nuclear-powered submarines was driven by changing dynamics in the Asia-Pacific region, where China is increasingly asserting its claims to near- entire South China Sea.
This reversal has angered Paris, with French President Emmanuel Macron accusing the Australian leader of lying about the future of this contract with an initial value of 50 billion Australian dollars.
According to a study published in December by the Australian Strategic Policy Institute, the Aukus program will cost more than $80 billion and take decades to become operational.
It should nevertheless, according to this same study, give Australia a significant advantage in its ability to deter aggression.
