Aukus: Australia to pay €555m settlement to French firm

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Australia has agreed to pay France's Naval Group 555m as compensation for not signing a submarine deal with Paris.

A 35 billion deal to build a fleet of submarines was abruptly canceled by Australia.

There was a bitter row that threatened to derail the EU-Australia trade agreement talks.

The prime minister said it was a fair and equitable settlement.

He said that he was going to France soon to "reset" a relationship that had become strained.

The French Defence Minister said the settlement would allow them to look to the future.

• What is Aukus? It's a security pact between Australia, the US and UK. It allows for greater sharing of intelligence, but crucially it gives Australia secret technology to build nuclear-powered submarines, though not equipped with nuclear weapons
• What's the aim? Aukus is widely seen as a response to the growing power of China, and an effort to counter its influence in the contested South China Sea
• Why did it anger France? Australia cancelled a US$37bn (A$52bn; £27bn; €35bn) deal with a French company building diesel-powered submarines, and, what's more, France - a traditional Western ally - found out about the new pact only a few hours before the public announcement

In order to counter China's influence in the South China Sea, Australia will be given the technology to build at least eight nuclear-powered submarine.

Analysts say the pact is one of the country's biggest defence partnerships in decades.

Australia will be the seventh nation in the world to operate a nuclear-powered submarine.

The decision by Australia to end its submarine contract with France drew anger from Paris, with the President accusing Australia's former PM Scott Morrison of lying and recalling his ambassador from Australia.

Australia elected a Labor leader for the first time in more than a decade last month, and relations between the two countries are back to normal.

"We are going to reestablish a better relationship between Australia and France," Mr Albanese said after talking to Mr. Macron.

I'm looking forward to visiting Paris at the earliest opportunity, thanks to presidentMacron.

The failed French submarine contract will cost Australian taxpayers A$ 3.4 billion, with almost nothing to show for it.

There have been a number of political and trade disputes between the countries.

After Australia called for a probe into the origins of coronaviruses, relations deteriorated.

The Defence Minister said that Australia wanted "respectful" relations with all countries in the region.

Australia and China have a good relationship. China won't be leaving. He said that we all need to prosper together.

Australia, the US and the UK have been accused of having a "Cold War mentality" by China.