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Iran and India Agree on Long-Term Cooperation

Iranian Foreign Minister Hossein Amir-Abdollahian and the visiting Indian Minister of Ports, Shipping and Waterways Sarbananda Sonowal hold talks in Tehran on Tuesday. (Iranian Foreign Ministry)
Iranian Foreign Minister Hossein Amir-Abdollahian and the visiting Indian Minister of Ports, Shipping and Waterways Sarbananda Sonowal hold talks in Tehran on Tuesday. (Iranian Foreign Ministry)
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Iran and India Agree on Long-Term Cooperation

Iranian Foreign Minister Hossein Amir-Abdollahian and the visiting Indian Minister of Ports, Shipping and Waterways Sarbananda Sonowal hold talks in Tehran on Tuesday. (Iranian Foreign Ministry)
Iranian Foreign Minister Hossein Amir-Abdollahian and the visiting Indian Minister of Ports, Shipping and Waterways Sarbananda Sonowal hold talks in Tehran on Tuesday. (Iranian Foreign Ministry)

Iran and India signed on Monday a 10-year contract to develop and operate the Iranian port of Chabahar, located at the mouth of the Gulf of Oman.

The contract is a further step to strengthen ties between both countries. It came as Washington has warned of potential sanctions for any country considering business deals with Iran.

On Tuesday, Iranian Foreign Minister Hossein Amir-Abdollahian held talks with Indian Minister of Ports, Shipping and Waterways Sarbananda Sonowal, who is visiting Tehran to sign the new contract.

Abdollahian emphasized that Tehran views its relationship with India as strategic, stressing that it was keen on reaching long-term cooperation with New Delhi, reported Iran’s state-run IRNA news agency.

“Our approach to relations with India is strategic and we are ready to further expand our cooperation with India in bilateral and multilateral capacities and within the framework of BRICS and Shanghai Cooperation Organization,” the top Iranian diplomat said.

Abdollahian also termed the recent agreement between the two states as a very important opportunity to expand the volume of trade relations, according to IRNA.

India has been developing the port in Chabahar as a way to transport goods to Iran, Afghanistan and central Asian countries, bypassing the port of Karachi and Gwadar in its rival Pakistan.

US sanctions on Iran, however, slowed the port's development.

“Chabahar Port's significance transcends its role as a mere conduit between India and Iran; it serves as a vital trade artery connecting India with Afghanistan and Central Asian Countries,” Sonowal said after the signing of the agreement.

US State Department deputy spokesperson Vedant Patel, asked about the deal, told reporters that US sanctions on Iran remain in place and warned that Washington will continue to enforce them.

“Any entity, anyone considering business deals with Iran - they need to be aware of the potential risks that they are opening themselves up to and the potential risk of sanctions,” Patel said.

The long-term deal was signed between Indian Ports Global Limited (IPGL) and the Port & Maritime Organization of Iran.

Under the agreement, IPGL will invest about $120 million while there will be an additional $250 million in financing, bringing the contract's value to $370 million, said Iranian Minister of Roads and Urban Development Mehrdad Bazrpash.

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France Has a New Government, Again. Politics and Crushing Debt Complicate Next Steps

France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
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France Has a New Government, Again. Politics and Crushing Debt Complicate Next Steps

France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)

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 Middle East: 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.

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 US 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.

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.