Leaders of France, Australia hold first talks since subs row 'broke' trust

French President Emmanuel Macron spoke with Australian Prime Minister Scott Morrison by telephone on Thursday for the first time since the diplomatic crisis over a scrapped submarine deal last month, the Elysee Palace said.

Macron reiterated that Canberra's decision to cancel a deal for conventional-powered French subs in favour of US nuclear vessels "had broken the relation of trust between our two countries", his office said in a statement.

"It is now up to the Australian government to propose concrete actions that could embody the will of Australian authorities to redefine the bases of our relationship and pursue joint action in the Indo-Pacific region."

France's ambassador to Australia was recalled to Paris after Australia walked away from the 56 billion euro deal to build a fleet of French submarines, instead opting for a pact with the US and UK.

France was furious, saying it had been given no warning of the deal.

Australia had signed a contract in 2016 to buy the French subs, a deal worth Aus$50 billion (31 billion euros, $36.5 billion) when signed.

France recalled its ambassadors to Australia and the US in protest, with Foreign Minister Jean-Yves Le Drian denouncing "a stab in the back".

Paris is also insisting on financial compensation.
"Close attention will now be paid regarding the situation for the French companies and their sub-contractors, including Australian firms, impacted by this decision," the Elysee statement said.

(- AFP)