G20 summit: Macron knew submarine deal was over before AUKUS, sources say

French President Emmanuel Macron knew long ago that his country’s submarine deal for Australia was in trouble but “he just didn't want to hear it.”

Scott Morrison has declared that he “won’t cop sledging on Australia”, after a dramatic day which saw French president Emmanuel Macron accuse the Australian leader of lying to him about the fate of his country’s deal to build diesel submarines for Australia.

During a press conference in Glasgow in which he was also challenged about this newspaper’s reporting of events, the Prime Minister defended the decision to ditch the French deal due to the changing strategic environment.

“This submarine was not the submarine that Australia needed,” he said.

It comes as The Daily Telegraph can reveal that Mr Macron knew long ago his country’s deal to build submarines for Australia was in trouble but “he just didn’t want to hear it”.

This is despite Mr Morrison being upfront about issues even before the AUKUS arrangement was inked.

The reports, from sources familiar with talks between the two men, appear to torpedo claims by Mr Macron – which were quickly backed in by Opposition Leader Anthony Albanese – that Mr Morrison lied to him about the future of France’s deal to build diesel submarines for Australia.

However, The Daily Telegraph can reveal that far from being kept in the dark, Morrison made multiple attempts to raise issues about France’s provision of the submarines long before the AUKUS arrangement to acquire nuclear-powered subs was finalised.

Prime Minister Scott Morrison and French President Emmanuel Macron talk at the G20 in Rome. Picture: Adam Taylor

At a dinner at the Elysee Palace in Paris in June, Morrison is understood to have raised a number of issues about Australia’s $90bn deal with France’s Naval Group to assemble diesel submarines in Adelaide.

Rather than trying to save the deal or understand that it was in danger of being cancelled due to ongoing concerns about timelines, cost, and whether they were a good fit for Australia’s strategic needs, Mr Macron is understood to have told the prime minister, “I don’t like losing.”

The Daily Telegraph also understands that two days before the AUKUS arrangement was announced, Macron messaged the prime minister to say that he was not available at the time Australia was seeking for a call and said, “Should I expect good or bad news for our joint submarines ambitions?”

Sources close to the talks between the two men say that at the time there was little doubt about the future of the French submarine contract.

“Macron was told pretty clearly, but he just didn’t want to hear it,” one source said.

The revelations of the exchanges between the two men came after an extraordinary attack by Mr Macron on the Morrison government.

On Monday morning local time, the French president said, “I don’t think, I know,” when asked by journalists if he thought Prime Minister Scott Morrison lied to him about the cancellation of the $90bn Naval Group diesel submarine contract which was already plagued by delays and cost overruns.

France's President Emmanuel Macron during the G20 Summit. Picture: Ludovic Marin/AFP

Macron added, “The AUKUS deal was very bad news for France — but not just for France, because I think it’s a very bad news for credibility of Australia and a very bad news for the trust that great partners can have with the Australians.

“I think this is detrimental to the reputation of your country and your Prime Minister.”

In Tamworth, Opposition leader Anthony Albanese was quick to take the side of the French, saying, “Australians need a leader who can be trusted.”

However Acting Prime Minister Barnaby Joyce was quick to put the matter in perspective.

“We didn’t steal an island, we didn’t deface the Eiffel Tower. It was a contract,” Mr Joyce said.

“And contracts have terms and conditions and one of those terms and conditions and propositions is that you might get out of the contract.”

Senator James Paterson, who chairs the powerful Parliamentary Joint Committee on Intelligence and Security, said, “Anyone paying even the slightest attention would have been well aware of the issues with the French build.

“It would have been grossly irresponsible to persist with a design that we knew would no longer meet our strategic needs, particularly when a superior alternative was available.

“If Anthony Albanese cares more about hurt feelings of the French than he does about acquiring the capability we need to defend ourselves he should just say so,” he said.

The deal to buy submarines off the French, to be assembled in Adelaide, was contentious when it was first inked by the government of Malcolm Turnbull, who overturned attempts by the previous government of Tony Abbott to give the submarines contract to Japan and cement relations between Canberra, Tokyo, and Washington.

The submarines deal has caused great problems between Australia and France.

Flinders University’s Dr Romain Fathi said the deal was always going to be problematic because “populist politics” meant that there had to be an immense transfer of technology from France to Australia.

“Part of the problem is they wanted to provide work to the local workforce,” he said.

“And it was bound to be plagued with issues because Naval Group was making the hull and the boat which was going to be fitted to Lockheed-Martin weapons systems.”

Other sources close to the original negotiations with the French have also told The Daily Telegraph that France oversold their capabilities to build the boats in Adelaide, raising the spectre that Naval Group may have been guilty of untruths of their own.

“They privately assumed that at least the first few submarines would be built in France and that maybe down the road they would start to be delivered in Adelaide,” the individual familiar with both sides of the process said.

“The skills and technology weren’t there to make it happen, so they figured the need for the submarines would eventually win out and they’d start making them in France.”