France to send bill to Australia for cancelled submarine contract

Naval Group chief executive Pierre Éric Pommellet told France’s Le Figaro newspaper in an article published Wednesday that a bill would be sent to Canberra in the coming weeks. Australia had agreed in 2016 to buy 12 diesel-powered submarines from the French, and the break fee – on top of the more than a billion dollars reportedly spent during the design phase – could be substantial.

Pommellet said that Australia had told his company, which is majority-owned by the French taxpayer, to go ahead with a new phase of the program on the very morning last week that the contract was terminated. “We were in shock. This decision was announced to us without any notice,” he told the newspaper. “Very few companies have experienced such a [brutal] scenario.”

Naval Group would bill the Australians for current and future costs related to infrastructure and redeploying employees, Pommellet said, adding that Canberra had asked for a detailed breakdown of costs. “Australia terminated the contract [on its own accord], which means that we are not at fault.”

Canberra told Naval Group on Sept. 15 that a review had been completed, as required by contractual agreements, said a spokeswoman for Australia’s defense ministry in an email. “This correspondence did not refer to or authorise commencement of the next phase of the program, which remained subject to the announcement of decisions by the Australian Government.”

Australia has insisted that Prime Minister Scott Morrison warned French President Emmanuel Macron of problems with the contract during a visit to Paris in June. But there has been an ugly diplomatic rupture, with Macron recalling France’s ambassadors to the United States and Australia over what it saw as a “betrayal.”

Paris did not recall its ambassador to London,sparing Britain from the worst of the fallout partly because French officials saw it as a junior partner in the new defense pact, with foreign minister Jean-Yves Le Drian likening Britain’s role to that of a “fifth wheel on the carriage.”

But that didn’t stop British Prime Minister Boris Johnson from telling reporters in Washington on Wednesday, in a mash-up of schoolboy French and English, that it was time for Paris to “prenez un grip” (get a grip) and “donnez-moi un break” (give me a break).

Morrison, who is in the United States for meetings with world leaders, said he has unsuccessfully tried to arrange a conversation with Macron. There has so far been no word on when France may return its envoy to Canberra.

Macron will send France’s ambassador to the United States back to Washington next week after he spoke with President Biden on the phone on Wednesday and agreed to meet in person at the end of October. Macron had been said to want an apology from Biden, but a joint statement following Wednesday’s call stopped short of saying there had been one, The Washington Post reported.

Some British officials believe the French government has kept the public spat running in an effort to boost compensation for the cancellation of the submarine contract, the Guardian newspaper reported. (Washington Post)