Iran’s economy on brink of collapse – Israeli Finance Minister

PanARMENIAN.Net - Iran's economy is edging towards collapse due to international sanctions over its controversial nuclear program, Israeli Finance Minister Yuval Steinitz said on Sunday, September 30, Reuters reported.

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.

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.

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.