Iranian Military Plans to Test Fire Missiles
MALVEAUX: Welcome back to NEWSROOM INTERNATIONAL, where we take you around the world in 60 minutes. Iran flexing its military muscle again. And the Iranian military plans to test fire missiles. That is right. Starting today, the country's semi-official news agency says the missiles will target desert bases made to look like the air bases of some regional powers. Michael Holmes is here to talk a little bit about the war games. I think the timing of this is really important. European Union now deciding that they're going to go ahead full with this (inaudible)?</s>MICHAEL HOLMES, CNN CONTRIBUTOR: Yes.</s>MALVEAUX: Is it -- how threatened does Iran feel at this moment?</s>HOLMES: (Inaudible) nuclear program. And all of this ties into that. What we have seen is the E.U. embargo on (inaudible) oil come into full effect as of July the 1st. What that is going to do, 18 percent of Iran's exports came from European imports; that has all gone now. You're talking hundreds of millions of dollars, a major exporting country now finding that it's lost that huge market that it had. Also European countries (inaudible) ship the oil, can't insure the oil. It's just making -- giving Iran a hard time. And yes, it comes right at a time when they are doing these war games, which is basically flexing their muscle in the region saying, hey, we can take care of ourselves while you are pressuring us about the nuclear issue. There's a whole lot of things (inaudible) --</s>MALVEAUX: (Inaudible) the oil embargo -- and we're talking about like 80 percent of this revenue that they get -- they're getting. If this is coming from that oil that they're exporting?</s>HOLMES: Eighty percent of their foreign oil -- their foreign revenues comes from oil, yes, something like half of it total revenues comes from oil. And as I say, the European Union was a chunk of that, lot of other oil goes to China, goes to Indonesia, goes to other places. Well, this is a significant economic impact on a country that is already having economic woes caused by the sanctions that are already in place.</s>MALVEAUX: So how much more can the Iranian people take?</s>HOLMES: Yes.</s>MALVEAUX: I mean, when is this actually -- where's the tipping point here, do you think?</s>HOLMES: You know, a lot (inaudible) say that this -- these sanctions that have been put (inaudible), a lot of people say, ah, sanctions (inaudible). It is squeezing Iran. The economy (inaudible) having a (inaudible) inflation something like officially 25 (inaudible). It's a lot more than (inaudible) the currency, the real, has been devalued against other currencies 50 percent. So a lot of Iranians are going broke. Other than those who are currency speculators, who are making all the money. And so the economy -- bread's gone up 16 times -- or 16-fold in the last two years. So it's pretty hard for the average Iranian. And they're starting to feel it. You think about (inaudible). Iranians are very sort of traditional outside of the capital. In the capital, you could say there's a lot of pro-Western sort of feeling among the younger people. They're very tech-savvy (inaudible). You start squeezing them, they get angry. Well, that's the whole idea of this.</s>MALVEAUX: Is anybody threatened by these war games today, when you take a look at what they're doing?</s>HOLMES: No, it's the usual sort of bellicose stuff that you hear from the Iranians. We can protect ourselves. Our missiles can reach U.S. bases in the area. If Israel tries to attack us, we will attack them and destroy them, that sort of stuff. (Inaudible) in Bahrain is also having its own military exercise and they're foes as well, a lot of that going on. The economic stuff, interesting, though, and I think that's where watch this impact. The talks themselves, the nuclear talks, which is at the heart of all this, going nowhere.</s>MALVEAUX: All right.</s>HOLMES: Absolutely nowhere at the moment.</s>MALVEAUX: This is a complicated (inaudible) --</s>HOLMES: It is, isn't it? I mean, (inaudible) one thing leads to another leads to another. But it is all intertwined. It is very important.</s>MALVEAUX: All right. Thank you, Michael, appreciate it. Sunday after Sunday, they are burning more and more churches to the ground in Kenya. We are going to find out what is behind the violence.