Iran parliament censures Rouhani in sign pragmatists losing sway

LONDON, (Reuters) – Iran’s parliament voted on Tuesday to reject President Hassan Rouhani’s explanations for economic hardship after a dramatic grilling on live TV, a sign his pragmatic faction is losing sway to hardline rivals as new U.S. sanctions begin to bite.

The vote in parliament came two days after lawmakers sacked the minister of economy and finance and weeks after they sacked the labour minister, blaming them for the collapse of the rial currency and surging inflation.

Rouhani won two landslide elections on a platform of economic reform and opening Iran up to the outside world, and his pragmatic supporters have a majority in the parliament. But his reputation and political influence have taken a sharp hit as his promised economic gains have failed to materialise.

His highest profile achievement was to negotiate the lifting of financial sanctions on Iran in a 2015 deal with world powers over its nuclear programme, but U.S. President Donald Trump pulled out in May and Washington has re-imposed sanctions.

Rouhani spoke out in parliament in defence of his economic record, blaming the country’s woes on the U.S. sanctions rather than his team’s management. But a majority of lawmakers voted to reject his explanation in four out of five areas.

There were conflicting reports about what would follow from the vote: several Iranian news agencies said Rouhani’s case would now be referred to the judiciary, although the spokesman for the parliamentary leadership, Behrouz Nemati, said lawmakers must hold further discussion before that would take place.

The action in parliament is a further sign of how the Trump administration’s decision to re-impose sanctions could affect Iran’s leadership and its relationship with the outside world, potentially for decades to come.

Iran’s rulers have been divided between a pragmatic faction that aims for better international relations, and hardliners who are wary of reforms. Trump’s decision to abandon the nuclear deal was opposed by U.S. allies in Europe, who argued that he undermined Rouhani and strengthened the hands of the hardliners.

While Rouhani and his cabinet run Iran’s day-to-day affairs, ultimate authority lies with the Supreme Leader, 79-year-old Ayatollah Ali Khamenei, in power since 1989. Weakening the pragmatists now could affect the choice of Khamenei’s successor.

For now, Rouhani’s own position appears safe. The judiciary could determine that he broke the law and parliament has the power to impeach him, but experts on Iranian politics say power struggles are more likely to play out indirectly.

“The parliament’s move is politically motivated and indicates that tensions would increase in the Islamic Republic in coming months,” Saeed Laylaz, an Iranian economist, told Reuters by telephone from Tehran.

“Iranian political factions have always used international issues to pursue their domestic gains,” he added.

After the sacking of the two ministers this month, Tasnim news agency reported that 70 lawmakers had signed a motion to impeach a third: the Minister of Industry, Mines and Business.

Rouhani has bowed to pressure and fired the head of the central bank. A deputy central bank governor was arrested by the judiciary on corruption charges in a crackdown that also saw foreign exchange dealers rounded up.

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