French envoy says Australia "in denial" over subs row, trust regained with U.S.

BANGKOK, Dec 9 (Reuters) - France has restored "a degree of trust" with ally the United States but not with Australia after a debacle over Canberra's cancellation of a multi-billion dollar submarine deal with Paris, a French regional envoy said on Thursday.

Christophe Penot, ambassador for the Indo-Pacific, said the rift with Canberra continues because the Australian government is still "in denial" about communication of the decision.

France accused its allies in September of stabbing it in the back when Australia opted for nuclear-powered submarines to be built with U.S. and British technology instead of a multi-billion- dollar French submarine programme.

The new security alliance, dubbed AUKUS, is designed to give Australia access to nuclear-powered submarines for the first time but caused a major diplomatic rift after France said it was not informed in advance.

Paris briefly recalled its ambassadors from Australia and the United States in protest. French President Emmanuel Macron later said Australian Prime Minister Scott Morrison had deceived him about Canberra's intentions, which Morrison's government denied.

A flurry of diplomatic contact with Washington resulted in an acknowledgement by U.S. President Joe Biden that the deal's announcement "was not handled in a graceful way", Penot told reporters in Bangkok on a trip that also included Singapore.

Biden met with Macron in October ahead of the Group of 20 summit.

"So we think that we have restored a degree of trust, mutual trust with our American ally," Penot said.

But he said no such trust had been regained with Australia.

"I don't think we have the same perception of how and why this happened," Penot said.

"So it is difficult to make progress and restore trust if they are in denial."

Morrison has argued that he had previously explained to Macron that conventional submarines would no longer meet Australia's needs ahead of the AUKUS deal.

Reporting by Kay Johnson; Editing by Martin Petty

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