Scott Morrison sinks Emmanuel Macron’s subs contract ‘lie’

Scott Morrison says he told the French leader the subs contract was on the ropes and that he will not cop ‘sledging’ and ‘slurs against Australia’.

Scott Morrison has moved to defuse the diplomatic row sparked by Emmanuel Macron’s accusation that he lied over the dumping of the French submarine deal, saying he personally told the French leader the contract was on the ropes and Australia was looking at alternatives.

The Prime Minister declared he would “make no apology’’ for safeguarding the nation’s defence interests and dumping the $90bn Naval Group contract.

After the French President accused the Prime Minister of lying about the scrapping of the contract, Mr Morrison on Monday night outlined detailed conversations and warnings with the French about how Australia was pursuing a different deal before finally killing it off.

Mr Morrison said he did not “seek to personalise the spat” but then hit out, saying he would not cop “sledging” and “slurs against Australia”.

The Prime Minister said the French project had been beset by delays, as well as questions over costs and the level of Australian content. About 18 months ago, he had began to explore alternatives.

“The submarine contract was a significant investment decision taken five years ago,” he said.

“At that point, given the strategic circumstance, time and technology available to Australia, the Attack-class submarine was the right decision … but there have been significant changes that have occurred in our strategic environment in the Indo-Pacific, which completely changed the game.”

Mr Morrison said the government would not “settle for less” and accept submarines that would be “obsolete before they hit the water”.

“The purpose of this contract was to deliver submarines to Australia that would suit our defence and our strategic offences – that was the point of this contract,” he said.

Mr Morrison said after discussing the AUKUS deal with British Prime Minister Boris Johnson and US President Joe Biden, he had aired Australia’s concerns with Mr Macron at the Elysee Palace in Paris on June 15 this year.

He said he had told the French President Australia had concerns about the project and was looking at alternatives to the Naval Group submarine. Following the dinner, Mr Macron despatched Admiral Bernard-Antoine Morio de l’Isle to Australia to address concerns with the contract. Mr Morrison said given delays to the submarine contract, there was concern among Australian officials that the boats might not hit the water until as late as 2038 and they might be obsolete as soon as they were commissioned. “At the end of the day, I’m going to take the tough decisions to ensure Australia gets the best defence capability,” Mr Morrison said in Glasgow, where he is attending the COP26 climate change summit.

“You have to have the strength to put up with the offence sometimes that may cause. When you stand up for Australia’s interests, not everybody will like it. It’s not going to make everyone happy. You need to have the strength to be able to deal with that. I’m very confident about the decision I made in Australia’s interests.’’

Australia had tried to tell Mr Macron of the decision to cancel the project two days before the AUKUS announcement but Mr Macron messaged the Prime Minister saying he was not available for a call.

Mr Macron asked: “Should I expect good or bad news for our joint submarines ambitions ?’’

Mr Morrison said the French had failed to meet key deadlines within the submarine contract, adding that had these targets been reached on schedule, there would not have been an issue.

At the time of the G7 summit in Cornwall, Mr Morrison said he had not finalised his decision on terminating the submarine contract, stressing that the AUKUS negotiations were still ongoing.

“I want to stress, when we met in Carbis Bay (Cornwall), we had not at that point made a clear decision and neither had (our) trilateral partners about whether we will be absolutely proceeding with the nuclear submarine option.”

Mr Macron’s claim that Mr Morrison lied created a diplomatic incident on the sidelines of the G20 in Rome, but sources close to the deal say the President personally intervened to try to kill off the AUKUS nuclear submarine deal once he was informed of it.

Facing a battle to win his second French presidential election in April, Mr Macron delivered a rebuke of the Prime Minister as the G20 summit wrapped up in Rome, declaring: “You have to respect allies and partners … and this was not OK.”

The comments targeting a fellow G20 partner and military ally were made to Australian journalists minutes before Mr Morrison was due to front his final news conference in Rome.

Asked whether he thought Mr Morrison had lied to him about exiting the future submarine contract, Mr Macron said: “I don’t think, I know.”

Sources close to the discussions between the two leaders said the Morrison government had reason to be sensitive about releasing information about the nuclear submarine deal to Mr Macron too early.

When Mr Macron was finally informed of Australia’s decision to tear up the Naval Group contract, he actively tried to “kill the deal” and personally called on senior members of the Biden administration to drop it, those sources said.

While the Australian government didn’t scrap the contract when Mr Macron hosted Mr Morrison for a reception and private dinner at the Elysee Palace on June 15, it was made explicit to the French leader that the agreement was not going to proceed.

Mr Macron had invited Mr Morrison for dinner in Paris specifically to persuade the Australian government not to terminate Naval Group’s contract.

The timing of the dinner came shortly after the G7 summit in Cornwall.

During the Elysee Palace dinner, Mr Macron said “I don’t like losing” and began personally wooing Mr Morrison via texts to ensure Naval didn’t lose its $90bn contract, sources said.

French officials then launched a “full court press” in July after realising the submarines would likely be lost to the US and that Mr Morrison’s warning about contract gates would be enacted.

In his remarks to journalists at the G20, against the advice of officials walking with him, Mr Macron mocked Australia’s 18-month review into how it would acquire nuclear submarines from the US and Britain.

“You have 18 months before a report. Good luck,” he said.

Speaking in Rome, Mr Morrison said Mr Macron had understood what the contract gates were and that Australia was considering other options.

“It is not a small thing to not go through the gate on a contract of that size. But that’s why you have gates in contracts. You have gates in contracts because you make decisions (on) whether you wish to proceed or not,” he said.

“But Australia decided not to proceed. That was our right. That decision was made in Australia’s national interest.”

Mr Morrison and Mr Macron had earlier been photographed together smiling after Mr Morrison approached him in the G20 leaders’ lounge the day before to shake his hand and break the ice.

Mr Morrison also rejected Mr Macron’s claim he had been “lied” to over the government’s decision to establish the AUKUS military pact and build a sovereign nuclear submarine fleet.

He said he had been clear with the French leader when the pair met at the Elysee Palace in June that ¬“conventional submarines were not going to be able to meet our strategic interests and we were going to have to make a decision in our national interest”.

Asked if he had lied to Mr Macron, Mr Morrison responded: “No … I don’t agree with that.”

Acting Prime Minister Barnaby Joyce responded to Mr Macron’s comments by saying Australia “didn’t steal an island” or “deface the Eiffel Tower”, ¬arguing that contracts contained clauses allowing for termination.

“We got out of that contract. We got out of it because the best outcome for our nation and the protection of our nation was to go to the platform that we now have, that we’re now going towards building,” Mr Joyce said

Anthony Albanese said real problems were emerging in the relationship between France and the US and Australia after Mr Biden argued that Australia had been “clumsy” in exiting the submarine contract.