France is doing everything it can to show its anger at a cancelled $50 billion submarine contract, shocking officials in the US, UK, and Australia

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  • French fury towards the US and other allies has taken many in Washington by surprise.

  • France is furious after Australia canceled a lucrative submarine contract with a French firm.

  • Biden aides are said to believe Paris overreacted and will resume normal relations.

  • See more stories on Insider's business page.

The level of French fury towards the US and Australia over a canceled submarine contract has surprised officials in Washington.

France recalled its ambassadors to both countries and accused the two powers of "lying" to its officials, a dramatic and public rebuke to nations is generally treats as close allies.

"There has been lying, duplicity, a major breach of trust and contempt. This will not do," French foreign minister Jean-Yves Le Drian told France 2 on Saturday.

It came after he called the ambassadors to France and Australia back to Paris at the request of French President Emmanuel Macron - one of the most severe diplomatic snubs possible.

France had never recalled its Australian or US ambassadors before, Le Drian said. The move "shows the magnitude of the crisis that exists now between our countries," he concluded.

The UK, which he called a "third wheel" in the situation, did not see an ambassador recalled.

Australia announced last week that it was terminating a $50 billion contract with French-owned firm Naval Group to build its new fleet of submarines.

Australian Prime Minister Scott Morrison said the new fleet of nuclear-powered vessels would now be built domestically with help from the US and UK.

While the Biden administration had been bracing for a negative reaction from France to the move, aides were surprised by the ferocity with which France reacted, The New York Times reported.

Aides told the Times that they were particularly surprised by Le Drian's claim that the move was a "knife [or stab] in the back" - a remarkably forthright comment in the usually measured world of diplomacy.

In the short term, France's anger looks unlikely to abate. The loss of such a lucrative deal represents a significant financial blow to the French state, which is Naval Group's majority shareholder.

More importantly, President Macron saw its submarine deal with Australia as a way to bolster France's influence in the Indo-Pacific region, where he sees China as a growing threat.

Now he finds himself excluded from an Indo-Pacific security pact between three of its allies - the US, the UK, and Australia - which was designed to counter the growing threat of China.

Paris appeared particularly stung by the extensive efforts that Australia, the US, and the UK made to conceal their negotiations until the last moment.

Australia made no mention of the plans when Morrison met Macron in June, and Australian ministers assured their French counterparts as recently as last month that the contract was still on the table, Vox reported.

Jake Sullivan, the US National Security Adviser, only gave Australia a few hours' notice of the decision, The New York Times reported.

In the long-term, however, relations between the US and France appear likely to gradually return to normal. Biden's aides told the New York Times they believed France was being overdramatic.

France appears highly unlikely to keep its ambassadors out of Washington and Canberra for long, and President Macron has agreed to a request from President Biden for a phone call this week which may soothe tempers in Paris.

French officials also knew that the submarine contract had been beset by significant problems for years, including budget overruns, cultural differences, and disputes over domestic manufacturing.

More significantly, the US and France continue to have shared interests in the Indo-Pacific and elsewhere.

"The French (and other Europeans) should take Biden at his word when he expresses, as he did repeatedly on his visit to Europe in June, that he wants to deepen the transatlantic relationship," said Daniel Baer, a senior fellow at the Carnegie Endowment for International Peace in Foreign Policy.

"The United States needs France, and both Biden and the Europeans know it."

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