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. Macron’s strident criticism of Biden’s blundering over the Afghanistan withdrawal was, however, widely shared even by the British government.
There is also an element of British government payback for France, and Macron in particular, over Brexit. France under Macron was the standard bearer of EU intransigence over the negotiations. Boris Johnson and many cabinet members were taken aback by the virulence of Macron’s hostility to France’s closest and deepest defence partner in the Brexit negotiations. The French defence minister, who negotiated the Australian contract, this morning confessed his anger that allies could treat France this way, claiming that it was a ‘stab in the back’. He clearly did not realise how much of that vocabulary was directed at Franceduringin the Brexit negotiations. Had France been more accommodating with its closest defence ally over Brexit, it may have earned London’s support for France’s participation in the new nuclear-powered submarine deal. It was Churchill who intervened on France’s behalf at the end of the second world war to ensure she was awarded a permanent seat on the UN Security Council, thereby retaining France’s great power status (despite a truculent General de Gaulle). It would still be possible for Macron to redeem himself with the British government and retain a share of the new contract — and perhaps join Aukus — if he uses the international levers available to him. On becoming President of the EU Council on 1 January, France could commit, for instance, to renegotiating the Northern Ireland Protocol.
As to the Aukus pact, Emmanuel Macron is smarting. On the one hand for not being included, and on the other by Britain’s upstaging France by securing heavy-hitting partners to ease the burden that an Indo-Pacific strategy requires. He must also understand that the Aukus pact will be linked to other diplomatic and commercial networks in the region, notably with Japan. How Macron plays the coming weeks will determine France’s role in the region. Petulance towards the Aukus pact will produce no benefits. He knows deep down that turning to that old chestnut of calling for greater European defence integration, or European ‘strategic autonomy’, will produce little — and certainly nothing for the Indo-Pacific, given that other EU states have no naval power to project.
In his big strategic speech to French ambassadors in 2019 setting out his Indo-Pacific strategy, Macron stated clearly that Britain would be a key partner. In November this year, France and Britain will celebrate the 11th anniversary of the Lancaster House defence and security agreements. This will give Macron an opportunity to build some political capital with London by oiling the post-Brexit wheels when he takes over as President of the EU Council two months later.
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