How France Was Blindsided By The Australia-US Sub Deal

In June this year, French leader Emmanuel Macron welcomed Australia's Prime Minister Scott Morrison to Paris, with concern about the two allies' troubled submarine contract high on his mind.

In remarks made on the sunlit steps of the Elysee Palace, he turned to "dear Scott" as he called him and promised that France would "go further and faster, if possible" and "respond to Australian needs".

While Macron sounded like a slightly anxious salesman worried about a client slipping away, Morrison didn't mention the landmark deal -- worth Aus$50 billion (31 billion euros, $36.5 billion) when it was signed in 2016.

He said nothing in his public remarks about what is known as "the contract of the century" in France, which has since opened a giant rift in the Western alliance.

"We had heard about Australian worries about the contract," a source close to Macron acknowledged on condition of anonymity. "That's why we made ourselves available to respond to their questions and give them assurances.

"The president took the initiative to invite Morrison in June."

Australian concerns were a matter of public record, with worries focused on cost over-runs and delays, as well as the bigger issue of whether the 12 submarines would be fit for purpose once they entered service in the early 2030s.

In 2016, when the contract was signed, Canberra wanted conventional diesel-powered subs.

But five years later, a trade war with China and growing concern about Beijing's assertiveness around the Pacific had led to calls for nuclear versions, which can stay submerged for longer.

Interviews with high-level French officials paint a picture of Paris doing everything to keep the contract on the rails.

Only on September 15, hours before an official announcement, did Paris learn that Australia was ditching the French deal and entering a new partnership for nuclear submarines with the US and UK called AUKUS.

The sense of rage in Paris is over what Foreign Minister Jean-Yves Le Drian called "duplicity", "treachery" and a "stab in the back" -- as well as Morrison's lack of candour.

The Australian prime minister said on Sunday that Paris would have known Canberra had "deep and grave concerns" about French submarines beforehand, saying that he had raised issues with the deal "some months ago," as had other Australian ministers.

Over their dinner at the Elysee Palace in June, Macron pressed "ScoMo" for details about Australian worries about the contract with France's Naval Group.

Overall, the visit by the conservative Australian "did not go well," according to a third French source, who declined to give more details.

Two weeks earlier on June 2, Greg Moriarty, the top civil servant in Australia's Department of Defence, had set alarm bells ringing in Paris after he raised the possibility of "alternatives" to the French deal because of ongoing difficulties.

Defence Minister Florence Parly contacted her Australian counterpart Peter Dutton on June 9 to seek clarification and was given further reassurances, a fourth French source said, speaking on condition of anonymity.

Macron also sent a personal letter to Morrison after their dinner in June, while contacts between Australian and French officials, engineers and military officers intensified.

A series of warning lights were still flashing, however.

After his soothing words at the beginning of the month, Dutton raised "worries about the Australian capacities" for the first time in a call on June 24, the defence source said.

Suggesting nervousness in Paris, France's ambassador to Washington, Philippe Etienne, was "sent to check out every level in July -- companies, the NSA (National Security Advisor), the White House -- and he found nothing," one of the sources said.

After a summer of intense talks, a meeting in late August gave the French some comfort.

On August 30, the defence and foreign ministers from Australia and France held their first joint meeting via videoconference.

Among other things, they agreed in a joint statement to "deepen defence industry cooperation" and "underlined the importance of the Future Submarine program."

Confidence grew that the two sides were also on track to complete the so-called System Functional Review -- a key stage that had been under discussion for the last two years.

French satisfaction was to be short lived, however.

On Friday September 10, the embassy in Canberra flagged an unusual development back to Paris: the Australian defence and foreign affairs ministers were heading to Washington for in-person meetings.

The French were sufficiently alarmed to seek explanations from US Secretary of State Antony Blinken and US Defence Secretary Lloyd Austin, both of whom avoided calls with their French counterparts, according to a fifth French source.

On the evening of Wednesday September 15, European time, the first reports in the Australian press began to emerge with the bombshell news that Canberra was ditching the French contract.

French officials are adamant they learned about the decision this way.

"Morrison tried to reach the president when the rumour about the end of the contract was already in the press," a presidential source said.

Macron refused to take the call without prior clarification, the source said.

Morrison ended up sending a letter, which arrived "a few hours" before the public announcement.

In emergency talks between angry French officials and their US counterparts, the Americans explained that Australia had approached Britain, which then facilitated talks with the new US administration of Joe Biden.

In-person talks on the issue between Morrison, Biden and British Prime Minister Boris Johnson took place on the sidelines of a G7 summit in England on June 11-12 -- three days before Morrison arrived in Paris, French sources believe.

And even though Biden announced the AUKUS partnership in a joint statement with the other two leaders, the Americans insisted in private that it had been Australia's responsibility to inform Paris of the partnership.

"The last week has been like a blow to the head," one of the French sources said.