France’s president and prime minister managed to form a new government just in time for the holidays. Now comes the hard part. Crushing debt, intensifying pressure from the nationalist far right, wars in Europe and the Mideast: Challenges abound for President Emmanuel Macron and Prime Minister Francois Bayrou after an already tumultuous 2024. What's wrong with French finances? The most urgent order of business is passing a 2025 budget. Financial markets, ratings agencies and the European Commission are pushing France to bring down its deficit, to comply with EU rules limiting debt and keep France’s borrowing costs from spiraling. That would threaten the stability and prosperity of all countries that share the euro currency. France’s debt is currently estimated at a staggering 112% of gross domestic product. It grew further after the government gave aid payments to businesses and workers during COVID-19 lockdowns even as the pandemic depressed growth, and capped household energy prices after Russia invaded Ukraine. The bill is now coming due. But France’s previous government collapsed this month because Marine Le Pen’s far-right party and left-wing lawmakers opposed 60 billion euros in spending cuts and tax hikes in the original 2025 budget plan. Bayrou and new Finance Minister Eric Lombard are expected to scale back some of those promises, but the calculations are tough. “The political situation is difficult. The international situation is dangerous, and the economic context is fragile,” Lombard, a low-profile banker who advised a Socialist government in the 1990s, said upon taking office. “The environmental emergency, the social emergency, developing our businesses — these innumerable challenges require us to treat our endemic illness: the deficit,” he said. “The more we are indebted, the more the debt costs, and the more it suffocates the country.” How long will this government last? This is France’s fourth government in the past year. No party has a parliamentary majority and the new Cabinet can only survive with the support of lawmakers on the center-right and center-left. Le Pen — Macron’s fiercest rival — was instrumental in ousting the previous government by joining left-wing forces in a no-confidence vote. Bayrou consulted her when forming the new government and Le Pen remains a powerful force. That angers left-wing groups, who had expected more influence in the new Cabinet, and who say promised spending cuts will hurt working-class families and small businesses hardest. Left-wing voters, meanwhile, feel betrayed ever since a coalition from the left won the most seats in the summer's snap legislative elections but failed to secure a government. Read: Staying in office is the main challenge for troubled France's new government The possibility of a new no-confidence vote looms, though it's not clear how many parties would support it. What about Macron? Macron has repeatedly said he will remain president until his term expires in 2027. But France's constitution and current structure, dating from 1958 and called the Fifth Republic, were designed to ensure stability after a period of turmoil. If this new government collapses within months and the country remains in political paralysis, pressure will mount for Macron to step down and call early elections. Le Pen's ascendant National Rally is intent on bringing Macron down. But Le Pen faces her own headaches: A March court ruling over alleged illegal party financing could see her barred from running for office. What else is on the agenda? The National Rally and hard-right Interior Minister Bruno Retailleau want tougher immigration rules. But Bayrou wants to focus on making existing rules work. “There are plenty of (immigration) laws that exist. None is being applied," he said Monday on broadcaster BFM-TV, to criticism from conservatives. Military spending is a key issue amid fears about European security and pressure from U.S. President-elect Donald Trump for Europe to spend more on its own defense. French Defense Minister Sebastien Lecornu, who champions military aid for Ukraine and ramping up weapons production, kept his job and stressed in a statement Tuesday the need to face down ‘’accumulating threats'' against France. Read more: Macron to address France after no-confidence vote ousts govt More immediately, Macron wants an emergency law in early January to allow sped-up reconstruction of the cyclone-ravaged French territory of Mayotte in the Indian Ocean off Africa. Thousands of people are in emergency shelters and authorities are still counting the dead more than a week after the devastation. Meanwhile the government in the restive French South Pacific territory of New Caledonia collapsed Tuesday in a wave of resignations by pro-independence figures — another challenge for the new overseas affairs minister, Manuel Valls, and the incoming Cabinet.

Sri Lanka’s leaders agreed that lawmakers will elect a new president next week but struggled Tuesday to decide on the makeup of a new government to lift the bankrupt country out of economic and political collapse. Desperate in the face of severe shortages of food, fuel and medicine, protesters on Saturday stormed embattled President Gotabaya Rajapaksa’s home, his seaside office and the official residence of his prime minister in the most dramatic day of a three-month crisis. Both officials said they would concede to demands that they resign: Rajapaksa promised to step down Wednesday, while Prime Minister Ranil Wickremesinghe said he would leave once a new government was in place. In a possible indication of the president's next move, immigration officials said Rajapaksa's brother, who was once his finance minster, tried to leave the country on Monday night. Local media reported he was not able to. But negotiating a new government has stymied opposition leaders — and the protesters have said they will stay put in the official buildings until their top leaders are gone. For days, people have flocked to the presidential palace turning it into almost a tourist attraction — swimming in the pool, marveling at the paintings and lounging on the beds piled high with pillows. At one point, they also burned the prime minister's private home. A partial solution came late Monday, with lawmakers agreeing to elect a new president from their ranks in the coming days. Nominations for the post will be submitted on July 19, and a secret vote will follow in Parliament on July 20. The new president will serve the remainder of Rajapaksa’s term, which ends in 2024. But they have not yet decided who will take over as prime minister and fill the Cabinet. Between Rajapaksa’s expected resignation Wednesday and the vote, the prime minster will serve as president — an arrangement that is sure to further anger protesters who want Wickremesinghe out immediately. Read: Sri Lanka's new president to be elected on July 20: speaker The political impasse is further fueling the economic crisis since the absence of an alternative unity government threatened to delay an agreement for aid from the International Monetary Fund. In the meantime, the country is relying on aid from neighboring India and from China. Corruption and mismanagement have left the island nation laden with debt, unable to pay for imports of food, fuel, medicine and other necessities, causing widespread shortages and despair among its 22 million people. Sri Lanka announced in April it was suspending repayment of foreign loans due to a foreign currency shortage. Asked whether China was talking with Sri Lanka about possible loans, a Chinese Foreign Ministry official gave no indication whether such talks were happening. “China will continue to offer assistance as our capability allows for Sri Lanka’s social development and economic recovery,” said the spokesman, Wang Wenbin. “As to its debt to China, we support relevant financial institutions in finding a proper solution through consultation with Sri Lanka.” On Tuesday, Sri Lanka’s religious leaders urged protesters to leave the government buildings they're occupying if Rajapaksa steps down as promised Wednesday. The protesters have vowed to wait until both Rajapaksa and Wickremesinghe are out of office. It's not clear what will happen to those men once they do step down. Months of demonstrations have all but dismantled the Rajapaksa political dynasty, which has ruled Sri Lanka for most of the past two decades, and there is speculation the president may try to flee Sri Lanka — as apparently his brother tried to. S. Kanugala of Sri Lanka’s Immigration and Emigration Officers’ Association said Basil Rajapaksa’s name was spotted on a list of departures from Colombo airport Monday and his officers feared for their safety if they cleared him to leave. Kanugala said the officers withdrew from their posts and he did not know what happened to the brother. But local media reported he was prevented from leaving the country.

Syrian government forces pressed ahead Monday with a new military assault on the country's last rebel stronghold that began last week, an offensive that has set off a mass exodus of civilians fleeing to safer areas near the Turkish border.

Kuwait has formed a new government after the previous Cabinet was dissolved amid a dispute among powerful members of the country's ruling family, the Kuwait News Agency said Tuesday.