Today France is outraged. First, explicitly because Australia has broken a large contract to have a French company design their submarines and for that contract to be switched to a US-UK substitute. Secondly, sotto voce, because Emmanuel Macron’s Indo-Pacific strategy has been shaken by an Australian, American and British strategic agreement entitled Aukus, to which France has not been invited.
What are the facts of the matter? In 2016 Australia signed a contract with France to buy 12 conventional French-designed diesel-electric submarines for the Australian navy. The contract worth €35 billion was badged by the French as ‘the contract of the century’. In reality, only €8 billion was to go to the 60 per cent state-owned French company Naval Group. Most of the cost was to go on the build-in Australian shipyards to enable Australia to acquire technological skills for the future. A large tranche was to go to the American company Lockheed Martin for the defence systems. But most important of all for the French was the contract’s status as the ‘backbone’ of Macron’s defence pivot to the Indo-Pacific. More than a commercial blow, it is potentially a strategic demotion for France as a global power. It comes on the heels of another defence blow: the loss of a contract to sell Rafale fighter aircraft to the Swiss airforce, abandoned after the visit of President Biden to Switzerland, and the switch to American F-35s.
Why did the French lose the Australian contract? First because of the large cost overruns and delays in implementation (reminiscent of Hinkley Point) that were regularly flagged in the Australian press. This in itself was making the inferior diesel propelled submarines with a delivery date from 2030 look all the more obsolete in comparison to nuclear propulsion.
Second, Macron has not endeared himself to Washington in recent years — whoever the president — whether it was declaring Nato ‘brain dead’ his repeated insistence on European ‘strategic autonomy’ or his opposition to taking a hard line against China.