KRG cabinet approves financial ‘understanding’ with Baghdad over ongoing salary crisis

ERBIL — The Kurdistan Regional Government on Wednesday said it approved a new “joint understanding” with Baghdad on public sector salary payments, as tens of thousands of employees in the region continue to face severe delays in receiving their wages.

Despite being halfway through July, KRG employees have yet to receive their May salaries — now nearly 80 days overdue.

KRG Prime Minister Masrour Barzani chaired the Council of Ministers meeting in Erbil, attended by Deputy Prime Minister Qubad Talabani. According to an official statement, the council reviewed the region’s worsening financial situation and the results of recent negotiations with the federal government.

Barzani and Talabani presented details of the “mutual understanding” reached during talks in Baghdad on July 15. The agreement covers both oil and non-oil revenue obligations and was welcomed by the KRG cabinet, which authorized its implementation.

“The federal government is scheduled to send the salaries and financial entitlements of the Kurdistan Region,” the KRG said in a statement following the meeting.

The understanding follows a series of high-level meetings between Kurdish leaders and federal officials. On Tuesday, Prime Minister Mohammed Shia Al-Sudani met in Baghdad with Bafel Talabani, president of the Patriotic Union of Kurdistan. A statement from Al-Sudani’s office said the two sides emphasized the importance of “coordination and joint efforts to resolve outstanding matters in accordance with the applicable constitutional and legal frameworks and the relevant ruling of the Federal Supreme Court.”

Talks focused on “the delivery” of oil and non-oil revenues by the KRG and the release of public employee salaries. Yesterday, KDP President Masoud Barzani and Bafel Talabani led a four-hour meeting in Erbil to coordinate their positions ahead of the Baghdad visit.

Tensions between Erbil and Baghdad escalated in May after the federal Finance Ministry suspended monthly budget transfers to the KRG, accusing the regional government of exceeding its 2025 allocation by over 19 trillion dinars and failing to provide verifiable revenue data. The KRG has rejected those claims, maintaining it has met its constitutional obligations.