Australia agrees payout, ending France submarine spat

The tussle began in September 2021, when Australia's then-Prime Minister Scott Morrison abruptly ripped up a long-standing contact with the French state-backed Naval.

Australia unveiled a substantial compensation deal with French submarine maker Naval Group on Saturday, ending a contract dispute that soured relations between Canberra and Paris for almost a year.

Prime Minister Anthony Albanese said the French firm had agreed to a "fair and an equitable settlement" of 555 million euros (US$584 million) for Australia ending a decade-old multi-billion-dollar submarine contract.

The agreement drew a line under a spat that caused leader-level recriminations and threatened to torpedo talks on an EU-Australia trade agreement.

"It permits us to turn a page in our bilateral relations with Australia and look to the future," said French Defence Minister Sebastien Lecornu.

Mr. Albanese said he would travel to France soon to "reset" a relationship beset by "pretty obvious" tensions.

The tussle began in September 2021, when Australia's then-Prime Minister Scott Morrison abruptly ripped up a long-standing contact with the French state-backed Naval to build a dozen diesel-powered submarines.

He also stunned Paris by revealing secret talks to buy U.S. or British nuclear-powered submarines, a major shift for a country with little domestic nuclear capability.