No alternative to reform in Iran, former president says

The moment came during a live appearance by Vice President Jafar Ghaempanah on IRINN, Iran’s state television news channel.

Pressed repeatedly on the economy, Ghaempanah acknowledged that a roughly 30 percent decline in oil revenues, compounded by chronic energy shortages and the continued impact of sanctions, had sharply reduced government resources and damaged livelihoods.

Since the start of President Masoud Pezeshkian’s administration, he said, falling oil income had cut into production, deepened the budget deficit and left the state with far less room to maneuver.

The interview quickly drew attention online—not only for its substance, but for what appeared to be visible strain. Ghaempanah stumbled over basic facts, briefly referring to the June conflict with Israel as the “11-day war” and seeming uncertain about its timing, while at several points losing his temper as the interviewer pressed for specifics he struggled to provide.

Budget behind closed doors

The significance of the appearance became clearer the next day, when the government presented its annual budget bill to parliament in a closed-door session from which leaks soon emerged.

According to multiple reports—some echoed by state television itself—Hamid Pourmohammadi, head of the Planning and Budget Organization, told lawmakers that the government currently has no foreign-currency resources to support the proposed budget, sparking heated exchanges with MPs.

Leaked details indicate that next year’s budget will be around five percent smaller than the current one, an unusual move for a system long accustomed to expanding nominal spending even in difficult times.

That picture sits uneasily alongside public assurances from Economy Minister Ali Madanizadeh, who has claimed the draft was prepared with a near-zero deficit.

Crisis in plain sight

For years, large portions of Iran’s budget have been directed toward ideological and propaganda bodies, as well as institutions linked to powerful security organizations, even as basic services and productive investment have suffered.

Mehdi Pazouki told the reformist Rouydad24 website that budget deficits lie at the heart of Iran’s chronic economic instability. Inflation, he argued, is not a temporary shock but the outcome of sustained mismanagement.

Pazouki urged the government to privatize state- and military-owned companies and to halt the practice of allocating oil to military bodies to sell on the state’s behalf—steps that would challenge entrenched interests.

With oil revenues shrinking, energy shortages worsening and sanctions continuing to restrict access to hard currency, the state faces mounting limits on its ability to cushion economic pain.

Ghaempanah’s faltering television appearance was less an isolated embarrassment than a revealing symptom—one that briefly aligned official rhetoric with the economic reality the system usually works to conceal.

Speaking on Sunday, Ghalibaf warned that if the executive fails to address rising prices of basic goods, parliament would have a “duty” to take action.

But moderate voices in Tehran argue the episode is less about procedure than positioning.

“These remarks indicate a fundamental shift in relations between the presidency and parliament,” wrote the news website Rouydad24, arguing that Ghalibaf is recalibrating his role from co-manager of the system’s crises to its chief overseer.

By adopting an openly critical stance, the outlet said, Ghalibaf is seeking to distance himself from shared responsibility for deteriorating economic conditions while presenting parliament as an independent check on executive failure.

“If reshuffling occurs, parliament will claim victory; if not, impeachment becomes the ‘last unavoidable option,’” it wrote—placing political costs squarely on the government.

Moderate politician Hossein Nourani-Nejad said impeachment threats are being used to reshape the executive politically.

“The government is centrist, not reformist,” he said. “But the right is trying to gradually turn it into a conservative government.”

Parliament has already impeached and removed Economy Minister Abdolnaser Hemmati, with pressure building on ministers overseeing agriculture, roads and urban development, industry and trade, sports and welfare.

Parliamentary attacks have focused disproportionately on reformist or centrist ministers aligned with the government’s discourse.

Some lawmakers have gone further, openly calling for Pezeshkian’s resignation and even floating his impeachment on grounds of what they describe as “political incompetence.”

Most of those voices belong to the ultra-hardline Paydari Party and are closely aligned with Saeed Jalili, Pezeshkian’s rival in last year’s presidential election.

“That the head of another branch of power would threaten the president and government by invoking impeachment demands from a specific parliamentary minority is novel,” Esmail Gerami-Moghaddam of the Etemad-e Melli Party told Etemad.

By sharpening confrontation now, critics argue, Ghalibaf is seeking to shed collective responsibility for economic distress while signalling readiness for a future political contest—one in which blame, distance and “oversight” may matter as much as policy.

The backdrop is Ghalibaf’s own defeat to Pezeshkian in the last year’s presidential race—and widespread belief in Tehran that the coming years could bring major political shifts, creating incentives for senior figures to reposition early.

Deputy Speaker Ali Nikzad acknowledged the stakes, noting that if more than half the cabinet were removed or resigned, the government would lose its quorum.

He added, however, that “the position of the system”—a reference to Supreme Leader Ali Khamenei—is that the cabinet should complete its term.

The session was held to share information between the government and lawmakers on how to address public grievances, Abbas Goudarzi, spokesperson for parliament’s presiding board, told reporters after the meeting.

He said a five-member joint committee had been formed between the government and parliament, with briefings delivered by the heads of the Planning and Budget Organization and the Central Bank of Iran.

Ineffective policies

Goudarzi cited oil sales, the return of export earnings and unresolved foreign-currency obligations as key factors shaping current economic conditions, saying their combined impact had produced the present situation.

He pointed to the allocation of about $10 billion in subsidized foreign currency for essential goods as an example of ineffective policy design, adding that roughly $8 billion was directed to livestock feed while consumers continued to pay market prices for basic items.

“There is no logic in allocating this volume of currency if it does not reach its target,” Goudarzi said, adding that existing mechanisms had failed to translate support into lower costs for households.

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Iran introduced its preferential foreign-exchange system in April 2018 under then president Hassan Rouhani, fixing the dollar at 42,000 rials in an effort to cushion households from price shocks and ensure imports of essential goods and medicines using oil revenues.

As the gap between the official and market rates widened – and the rial slid to record lows above 1.32 million per dollar this week – the policy became increasingly costly.

The administration of Ebrahim Raisi dismantled the system as part of what it branded “economic surgery,” arguing that it fueled arbitrage, corruption among importers, and failed to benefit consumers.

Several months later, the government reinstated subsidized currency at 285,000 rials to the dollar, roughly half the market rate at the time. The scheme initially covered 25 categories of goods, though the list has since been pared back.

In recent months, preferential currency has been removed from imports of staples including rice, vegetable oil, red meat, animal feed, and some medicines.

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Budget pressure builds

The Tuesday morning session, Goudarzi said, was held behind closed doors, with an open afternoon meeting scheduled with the president.

The government will submit the draft budget to Iran’s parliament on Tuesday for the first time based on the new rial, following the removal of four zeros from the national currency.

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The new year's budget bill is being submitted to parliament amid signs it has been drafted as one of the most contractionary budgets in recent years.

Goudarzi described the Tuesday meeting as an attempt to coordinate the executive and legislative branches to manage economic and currency challenges.

He outlined a compressed review timetable, saying the draft budget will be examined by the combined budget committee within three days before being sent to the plenary, whether approved or rejected.

If endorsed, it will then move to specialist committees for further study under strict deadlines before returning to the combined committee and, ultimately, the full chamber.

Goudarzi noted that under parliamentary rules the government was required to submit the budget on December 23, but did so a day later because no open session was held to formally trigger the review process.

Since taking office, Pezeshkian has softened his language, accommodated rivals in key appointments, and defended compromise as the price of stability. 

Hardliners, however, have treated reconciliation not as mutual restraint but as opportunity—using it to settle scores, reclaim positions, and advance policies that run directly against his campaign pledges.

That imbalance was underscored last week by reformist daily Sharq, which warned that Pezeshkian’s conciliatory posture had become “a one-way road" for his political rivals.

“In private, hardline MPs admit fuel prices must rise; in public, they posture as defenders of the poor,” the paper wrote, adding that critics who decry internet filtering or strict hijab enforcement often exploit the same issues for political gain.

Taking advantage

Pezeshkian’s invocation of vefaq—the Arabic term for unity or accord—was meant to signal cooperation with constructive actors. Moderates now argue it has been interpreted as surrender rather than partnership.

Even explicit backing from the Supreme Leader has done little to shield the government. 

According to Sharq, hardliners routinely reframe his remarks to suit their own narrative, while parliamentarians amplify public anxiety by exaggerating crises such as fuel price hikes, spreading unsubstantiated claims, and calling for prosecutions that weaken state institutions.

A review of daily statements published on parliament’s official website, icana.ir, shows a steady stream of alarmist rhetoric and political point-scoring, reinforcing the impression of a faction more invested in spectacle than governance.

Compromise or surrender?

Rouydad24 this week extended the critique to Pezeshkian himself, questioning his repeated claims that he is resisting hardliner pressure.

The outlet cited his appointment of Saghab Esfahani as vice president for energy consumption optimization as evidence of retreat. 

“A president who reached office by promising honesty and resilience,” it wrote, “now repeats the language of resistance while compromising his ideals simply to remain in office.”

For a society long scarred by unfulfilled promises, such language signals repetition, not resolve.

Hardliners, Sharq concluded, offer no credible solutions to Iran’s mounting crises. Their relevance is sustained through vendettas, institutional erosion, and the exploitation of public grievance. 

Columnist Zohreh Farahani argued in a December 16 commentary that real governance requires courage, accountability, and respect for the rule of law, suggesting that all were absent from the current administration in Tehran.

The result is a deepening political deadlock, he asserted. Reconciliation has moved in only one direction, leaving Pezeshkian weakened, moderates increasingly disillusioned, and Iran’s power balance as rigid as ever.

The outlet said Mohammad Bagher Ghalibaf’s unusually blunt warning in parliament this week – that lawmakers could move to impeach cabinet ministers if prices continue to rise – went beyond routine oversight and marked a strategic shift away from the rhetoric of “consensus” that initially defined relations between the legislature and the administration.

According to Rouydad24, Ghalibaf is seeking to distance himself from the government’s economic record as inflation, a plunging rial and rising living costs fuel public anger, recasting himself as an independent watchdog rather than a political partner.

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The analysis said the warning reflected a broader recalibration in Tehran, where parliamentary backing for the government has given way to open boundary-setting, including criticism of economic ministers and senior appointments.

Ghalibaf’s move comes as parliament has already demonstrated its willingness to act, having impeached Economy Minister Abdolnasser Hemmati earlier this year over rising prices, showing that the threat against the Pezeshkian government is not merely symbolic.

Kazem Delkhosh, the deputy for legislative affairs in the president’s parliamentary office, said on Monday that Pezeshkian and members of his economic team will attend a joint session of parliament on Tuesday to discuss broader economic issues and rising living-cost pressures.