ERBIL, Kurdistan Region - The Iraqi Council of Ministers has failed to reach a concrete decision to resolve the ongoing salary crisis affecting more than 1.2 million civil servants in the Kurdistan Region. Instead, the cabinet has opted to form a committee to address outstanding issues between Erbil and Baghdad. In a statement on Facebook, Karwan Yarweis, a Kurdish lawmaker in the Iraqi parliament representing the Patriotic Union of Kurdistan (PUK), said Tuesday that the cabinet “did not make a decision regarding the [stalled] salaries” of public sector employees in the Kurdistan Region. Tensions between Erbil and Baghdad escalated in late May when Iraq’s federal finance ministry suspended all budget transfers to the Kurdistan Regional Government (KRG), including salary payments. The ministry accused the KRG of overspending beyond its 12.67 percent share of the 2025 federal budget and failing to deliver its share of oil to the State Oil Marketing Organization (SOMO). The crisis has been further deepened by the ongoing suspension of oil exports from the Kurdistan Region via the Iraq-Turkey pipeline, which has remained offline since March 2023 following an international arbitration ruling. On Monday, a senior KRG delegation arrived in Baghdad to resume negotiations with federal officials over the long-running financial dispute that has led to repeated salary delays for public employees. A day earlier, Iraq’s parliament had announced that “solutions were reached” on major points of contention between Erbil and Baghdad, with plans to discuss them “in the coming days.” The statement followed a series of meetings between Iraqi Speaker Mahmoud al-Mashhadani and top Kurdish leaders in Erbil, including Kurdistan Region President Nechirvan Barzani and Kurdistan Democratic Party (KDP) leader Masoud Barzani. Informed sources told Rudaw last week that a major sticking point remains the volume of oil Erbil must commit to SOMO. While Baghdad has insisted on 400,000 barrels per day (bpd), Erbil has offered 280,000 bpd as an initial figure. According to MP Yarweis, the Iraqi cabinet on Tuesday formed a committee made up of representatives from the ministries of justice, health, finance, planning, and higher education. The committee is tasked with “reviewing and reconciling” two proposals submitted separately by the federal government and the KRG to address the salary crisis, oil revenues, domestic income, and taxation. Yarweis added that the two proposals overlap in several areas and will be jointly presented to the Council of Ministers for further discussion and potential approval. Later in the day, a well-placed source told Rudaw that the committee is scheduled to hold its first meeting on Wednesday to prepare recommendations for an upcoming extraordinary cabinet session. Earlier on Tuesday, Iraq’s state-run al-Sabah newspaper reported that negotiations between Erbil and Baghdad had made “significant progress,” and both sides were getting “closer” to reaching a resolution. The report added that efforts to finalize an agreement based on constitutional principles have been accelerated.
