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Ahmadinejad under growing internal criticism
During November pressure on Ahmadinejad has been growing from all corners of the Islamic Republic's establishment. Former President Khatami, a reformist who had been keeping a low profile after ending his second term, came out in October accusing Ahmadinejad of ignorance and criticising in particular his economic policies. Rafsanjani, also a former president, has always been criticisingAhmadinejad, but is now intensifying his campaign against him. What is likely more worrying for Ahmadinejad is the fact that influential conservatives are also stepping up their criticism of the President. Qalibaf, mayor of Teheran and likely future presidential candidate, criticised Ahmadinejad's lack of maturity and tactical sense in his confrontation with the Americans. Former Revolutionary Guards commander Rezaie was also reported to have criticised Ahmadinejad's confidence that US military power does not represent a serious threat to Iran. However, Ahmadinejad's position in the parliament seem now more solid than at the beginning of 2007. In November he won overwhelming parliamentary approval for his proposed new oil and industry ministers, despite the fact that such appointments are seen as increasing his control over the ministries and consequently over Iran's economic policies. Their predecessors criticised the policies of the government after being sacked by Ahmadinejad in August.

Sanctions and Ahmadinejad's response
The list of banks which have severed links with Iran continued to grow in November, following the imposition of new sanctions in October by the US. After some large Swiss and German banks, now smaller banks from France, Italy, the Netherlands, Malaysia, the UAE and Singapore are doing the same, some even going as far as closing accounts of private Iranian citizens. An Italian export credit agency has also stopped guaranteeing credit to firms operating in Iran .The financial isolation or Iran means that local businessmen have to travel in person or send somebody whenever they want to make payments abroad, raising considerably the cost of financial operations and forcing much Iranian capital to move abroad. The government has tried to substitute international banks with Chinese and some other Asian banks, but it does not seem to be sufficient. Iranian authorities estimate inflation at 17.5% now, while some external observers put the rate at 25%. Although major European energy firms such as Total, Shell, Eni and Repsol have not declared their intention to stop ongoing projects, they have been warned that any further investment in Iran would result in the withdrawal of American capital. However, the Chinese, who import 14% of their oil from Iran, are determined to strengthen their economic relationship with Iran, rather than freeze it. New joint economic projects are planned, while China appears increasingly as Iran's main international supporter: it was China that sabotaged the planned London meeting of Security Council powers (plus Germany) to discuss new sanctions against Iran. Iran's diplomatic position seemed stronger in November, after Russia and China made clear that they would not endorse military operations and that new UN-sponsored sanctions were unlikely too. 

The IAEA Report
A new report by the IAEA also seemed to strengthen Teheran's position, denying that Iran had diverted nuclear material from its civilian energy project. However, the report contained other information which gave comfort to the 'war party' in the vice-president's office, particularly that there are now 3000 functioning centrifuges in Iran, the amount which was said to constitute a red -line to the White House, with an inference if not evidence that Iran could now produce a weapon within a year. However that might be, the wild card here is Israel, who will have their own red-line, although it is not generally known what that is. We have long believed that if the chips were down, Israel would attack even without the sanction of the US, although they could hardly do it without their knowledge. Their use as a proxy might be seen as less damaging than a direct US attack, although there would inevitably be massive repercussions on the price of oil, the value of the dollar, the hopes for a measure of stability in Iraq; and no doubt a new brand of Shi'ite suicide bomber (who invented this killing technique in Iran's war with Iraq), manifesting itself. Israel's interest is that it is the one nation directly threatened by a nuclear-armed Iran, but it is the US that would inevitably pay the price indicated above. 

Down went the dollar
Ahmadinejad's strategy, despite its faults, scored some points during 2007. The decision of abandon trading in dollars has saved an estimated 14 billion Euros this year, while other oil producers still being paid in dollars lost considerably as the US currency lost 15% of its value this year. The Iranians have been trying to push for a wider shift to other currency in oil trading, possibly hoping to trigger a crisis of the dollar, but their attempt has been rebuffed by traditional US supporters such as Saudi Arabia, Nigeria and Qatar.

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