A deal between Australia, the UK and US which has implications for the rest of the world, including Greece and Cyprus

Both France and China have slammed the new Indo-Pacific security alliance between Australia, the United Kingdom and the United States.

Dubbed AUKUS, the deal will provide Australia with technology to deploy nuclear-powered submarines, however China has warned of an intensified arms race in the region.

Economist Steve Bakalis, a visiting professor at the Central University of Finance and Economics in Beijing, told Neos Kosmos that China’s submission of a formal application letter to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is no coincidence in the aftermath of Thursday’s announcement.

“I think it was kind of a countermove,” he said. “This indicates that the Chinese are telling us that we should not see them as a threat but as an economic partner.”

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Chinese Foreign Ministry spokesman Zhao Lijian told the press at his regular briefing in Beijing that the three countries, by entering the pact, were “severely damaging regional peace and stability, intensifying an arms race and damaging international nuclear non-proliferation efforts.”

France, too, has slammed the deal with the media calling it “treason” as the pact essentially throws the Naval Group’s $90-billion submarines program into the scrap heap years after Australia had positioned itself for contracts with the French shipbuilder. Suppliers such as Greek company Systems Sunlight, which had been shortlisted, alongside Osborne-based PMB Defence, for a bid to design and build batteries for Naval Group by early next year are reeling following the announcement.

France has accused the US of “stabbing it in the back” by pushing it aside from the lucrative defence deal it had signed with Australia.

“France takes note of the decision just announced by the Australian government to stop the future submarine program and launch co-operation with the United States,” French Foreign Affairs Minister Jean-Yves Le Drian said in an interview on Thursday morning.

“It is a decision contrary to the letter and the spirit of co-operation which prevailed between France and Australia.

“It’s a stab in the back. We had established a trusting relationship with Australia, and this trust was betrayed.”

Mr Bakalis said that the affront was more than just financial, as he imagined French President Emmanuel Macron learning of a deal, which held economic ramifications for his country, through the media.

Theo Theophanous, former Victorian MP, told Neos Kosmos that “the French are very upset and will use the European Union as a vehicle to suggest that the actions of the Australian Government in breaking the contract for conventional submarines with France is a snub, not only of France but of the whole of Europe” and would seek a European-wide response to make this clear.

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“It is important that Greece and Cyprus, while expressing sympathy for France, do not allow the vehicle of the EU to be used to punish Australia for what is ultimately a commercial arrangement between France and Australia. In taking up such a role, Greece will gain respect and the appreciation of Australia,” he said, warning that Greece and Cyprus should also not be “seduced by Russian and Chinese commentary that feigns support for Cyprus but hides an underlying agenda of wanting to divide the Democratic countries of the West”.

“On the positive side Greece and Cyprus can look forward to a revitalised Defence and strategic alliance between Australia the UK and the US (AUKUS). This alliance which is complemented by the QUAD arrangements involving India, Australia, the US and Japan creates a strong strategic and defence block that can counter authoritarian regimes such as Russia, China, Syria and others.”

Mr Theophanous said that it is important that strategic alliances include the EU, but not necessarily all of the NATO countries.

“This is because Turkey continues down its authoritarian path under Erdogan and this path is inconsistent with the values of the EU, the AUKUS and the QUAD,” he said, but also points to an opportunity which has arisen for Greece and Cyprus to “smooth relations between France and Australia and in that process raise the Cyprus issue and Turkey’s belligerence and slide to authoritarianism as a key issues that should be addressed”.

Mr Bakalis agrees that “Greece cannot take a neutral position and will align itself in the end with the US and/or the EU”.

Unlike Mr Theophanous, he believes that “Greece has much to gain by linking up with China in commercial ways to help with the revival of the Silk Road and become one of its pillars.”

Mr Bakalis said that the pact was “on the surface, not a good move by Australia, but we don’t know any intelligence behind this decision”.

He said it could be the result of “the uncertainty that we face in the world because of COVID-19 which prompts people to put up barriers against each other, and we can see this predominantly in the relationship of the west with China”.

READ MORE: Provoking China is not in Australia’s national interest

“In free trade, it is called mercantilism, when nations ignore that free trade brings about economic and social benefits for everybody and we tend to respond by putting barriers against each other.”

He said the West stands to lose from adopting “mercantilist ways”.

Mr Bakalis also focused on the secrecy of the deal without discussion other stakeholders. “It’s a huge decision with huge implications for Australia, and it was never on the agenda of the government when it was elected, though the government would say that it would have been prompted by the uncertainties of COVID-19,” he said.