Israel finance minister says Iran economy "on verge of collapse"

Sun Sep 30, 2012 7:02am EDT

Related Topics

* Recognition grows in Israel that sanctions having effect

* Netanyahu has said sanctions not forcing policy change

* Iran's oil income said to be down by over $40 billion

* Inflation reported to be hurting Iranians

JERUSALEM, Sept 30 (Reuters) - Iran's economy is edging towards collapse due to international sanctions over its controversial nuclear programme, Israeli Finance Minister Yuval Steinitz said on Sunday.

Israel regards the prospect of its arch enemy developing nuclear weapons as a threat to its existence, and Prime Minister Benjamin Netanyahu has said that, although sanctions are taking their toll, they are not yet forcing Iran to abandon work that could soon lead to a nuclear warhead.

However, Israeli officials appear increasingly ready to acknowledge the effect of recent American and European sanctions designed to restrict Iran's lifeline oil exports.

"The sanctions on Iran in the past year jumped a level," Steinitz told Israel Radio, noting that as finance minister, he follows Iran's economy.

"It is not collapsing, but it is on the verge of collapse. The loss of income from oil there is approaching $45-50 billion by the year's end," Steinitz said.

The United States, Israel's main ally, says it will not allow Tehran to produce the bomb, but sanctions should be given more time to work before force is considered.

American and Israeli commentators say a military strike to destroy Iran's nuclear plants, which Iran says are designed only to develop a nuclear generating capacity, could trigger a regional war with unforeseeable consequences.

In Israel too, some prominent political and military figures question Netanyahu's warning that Iran is so close to the threshold of nuclear capability that military action will soon be the only way to stop it.

But there has been no open split in his coalition over the issue. Steinitz praised the prime minister's speech to the U.N. General Assembly last week in which he used graphics to underscore the perceived Iranian threat.


An Israeli Foreign Ministry document leaked last week said sanctions had caused more damage to Iran's economy than at first thought and ordinary Iranians were suffering under soaring inflation, although this did not appear to be changing policy.

On Saturday, the Iranian currency slumped to an historic low of about 28,400 rials to the dollar, a fall of about 57 percent since June 2011, meaning a sharp rise in the price of imports.

"The Iranians are in great economic difficulties as a result of the sanctions," Steinitz said.

Parliamentary opponents of Iranian President Mahmoud Ahmadinejad say sanctions are not a major cause of Iran's economic problems and accuse his government of mismanaging the economy.

"The first approach today is that authorities accept their mistakes and failures, second, that they not blame their mistakes on others, and third, that they invite all the pundits and experts to find a way to solve the problems of the economy," Iranian legislator Ezzatollah Yousefian was quoted as saying by the Mehr news agency.

Israeli Foreign Minister Avigdor Lieberman told Saturday's Haaretz daily that he believed Iran's Islamic theocracy would be toppled in a revolt like the one that toppled Egyptian president Hosni Mubarak last year.

"The opposition demonstrations that took place in Iran in June 2009 will come back in even greater force," he told the paper. "In my view, there's going to be an Iranian-style Tahrir revolution. The young generation are sick of being held hostage and sacrificing their future."

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Comments (2)
c2horizon wrote:
lets face it Iranians are intelligent and worldly but are easily intimidated by their own Clerics. The Islamists took control of Iran over thirty years ago by being willing to be be very violent and murderous to any opposition which completely cowed and terrified the more peaceful and law abiding more secular majority. Prior to Khomeini, Iranians had great relationships with Israel and the west. I had Israeli friends who frequented Iran to help run businesses and farms. The average Iranian would be much better off if they were in good stead with Jewish Israel.

Sep 30, 2012 8:01am EDT  --  Report as abuse
sensi wrote:
The collective punishment, illegal and arbitrary “sanctions” aka extortion isn’t working as intended, surprise. All this garbage to please and boot-lick the israeli far-warmongering far-right, with the nauseous Netanyahu lying about a nuclear iran since no less than 1992, where Iran was already a few months from the bomb according to Bibi: what a ludicrous disgrace. Our ‘free press’ is as always complicit of this propaganda by hiding the truth -the IAEA stating again in august that there was no forbidden work nor diverted material from the Iranians- and playing the parrots of a very specific, amoral, agenda and storytelling made of lies.

@ c2horizon

Oh yeah, how great was the US and UK planted dictatorship of the Shah of Iran and its infamous SAVAK… The West toppled a democratically elected government in Iran to plant one of its beloved dictator that the iranians had to endure for decades, then the West funded and armed Saddam Hussein -another decade old CIA asset- in the Iraq-Iran war, two little ‘things’ which may explain the well-founded distrust and antagonism of some iranians with the western hypocritical world, don’t you think so?

Sep 30, 2012 7:27pm EDT  --  Report as abuse
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