Erbil Increases Pressure on Baghdad Amid Ongoing Salary Dispute

A session of the Kurdistan Regional Parliament (AFP)
A session of the Kurdistan Regional Parliament (AFP)
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Erbil Increases Pressure on Baghdad Amid Ongoing Salary Dispute

A session of the Kurdistan Regional Parliament (AFP)
A session of the Kurdistan Regional Parliament (AFP)

Kurdistan Region President Nechirvan Barzani prepares to visit Baghdad this week to attend a meeting of the State Administration Coalition, according to the Kurdistan Regional Government (KRG) spokesperson, Delshad Shihab.

Meanwhile, KRG Prime Minister Masrour Barzani criticized the federal government’s treatment of the region as “unacceptable.”

The State Administration Coalition, a political and parliamentary bloc, includes the Shiite Coordination Framework alongside Sunni and Kurdish parties supporting Prime Minister Mohammed Shia al-Sudani’s government. Despite their backing, Sunni and Kurdish factions have voiced frustrations over unfulfilled promises in the “political agreement document,” citing persistent disputes among political factions as the cause.

The worsening salary crisis has become a significant issue for the KRG, drawing public criticism from citizens. While Erbil insists that salary payments are an undeniable right, Baghdad has linked them to broader conditions, including Kurdistan’s obligation to hand over oil revenues, customs fees, and border checkpoint revenues to the federal government.

Despite occasional financial transfers from Baghdad under Sudani’s government—every two to three months—the payments have been insufficient to resolve the crisis in Kurdistan. Nechirvan Barzani’s upcoming visit to Baghdad aims to present a stronger Kurdish position. However, internal divisions between the Kurdistan Democratic Party (KDP), led by Masoud Barzani, and the Patriotic Union of Kurdistan (PUK), led by Bafel Talabani, as well as opposition from smaller Kurdish parties, weaken Erbil’s ability to assert its demands.

In preparation for Barzani’s visit, the KRG convened an “extraordinary” meeting on Saturday to forge a unified stance on its negotiations with Baghdad, in the presence of KRG representatives in Baghdad and leaders of Kurdish parliamentary blocs.

“The federal government’s treatment of the Kurdistan Region does not align with its status as a federal entity,” the prime minister said during the meeting.

He also accused the Iraqi authorities of selectively adhering to federal court rulings, stating: “The government only implements court decisions when they are against the Kurdistan Region’s interests.”

While it remains unclear how Baghdad will respond following the State Administration Coalition meeting, a KRG spokesperson hinted at the possibility of Kurdish blocs withdrawing from the federal government in protest over the salary crisis. However, achieving a unified Kurdish stance on such a significant decision remains uncertain due to internal disagreements among Kurdish parties.



Israel to Use Withheld Palestinian Tax Income to Pay Electric Co Debt

Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
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Israel to Use Withheld Palestinian Tax Income to Pay Electric Co Debt

Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)
Smoke rises from Jenin in the occupied West Bank, during clashes between militants and the Palestinian Authority's security forces, inside the Jenin refugee camp, on January 12, 2025. (Photo by JAAFAR ASHTIYEH / AFP)

Israel plans to use tax revenue it collects on behalf of the Palestinian Authority to pay the PA's nearly 2 billion shekel ($544 million) debt to state-run Israel Electric Co (IEC), Finance Minister Bezalel Smotrich said on Sunday.

Israel collects tax on goods that pass through Israel into the occupied West Bank on behalf of the PA and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.

Since the Hamas-led attack on Israel on Oct. 7, 2023, triggered the war in Gaza, Smotrich has withheld sums totaling 800 million shekels earmarked for administration expenses in Gaza.

Those frozen funds are held in Norway and, he said at Sunday's cabinet meeting, would instead be used to pay debt owed to the IEC of 1.9 billion shekels, Reuters reported.

"The procedure was implemented after several anti-Israeli actions and included Norway's unilateral recognition of a Palestinian state," Smotrich told cabinet ministers.

"The PA's debt to IEC resulted in high loans and interest rates, as well as damage to IEC's credit, which were ultimately rolled over to the citizens of Israel."

The Palestinian Finance Ministry said it had agreed for Norway to release a portion of funds from an account held since last January with 1.5 billion shekels, calling money in the account "a punitive measure linked to the government’s financial support for Gaza.”

The ministry said as part of the deal, 767 million shekels of the Norwegian-held funds will pay Israeli fuel companies for weekly fuel purchases over the coming months. A similar amount will be used to settle electricity-related debts owed by Palestinian distribution companies to IEC.

Smotrich has been opposed to sending funds to the PA, which uses the money to pay public sector wages. He accuses the PA of supporting the Oct. 7 attack in Israel led by Hamas, which controlled Gaza. The PA is currently paying 50-60% of salaries.

Israel also deducts funds equal to the total amount of so-called martyr payments, which the PA pays to families of militants and civilians killed or imprisoned by Israeli authorities.

The Palestinian finance ministry said 2.1 billion shekels remain withheld by Israel, bringing the total withheld funds to over 3.6 billion shekels as of 2024.

Israel, it said, began deducting an average of 275 million shekels monthly from its tax revenues in October 2023, equivalent to the government’s monthly allocations for Gaza.

"This has exacerbated the financial crisis, as the government continues to transfer these allocations directly to the accounts of public servants in Gaza," the ministry said.

It added it was working with international partners to secure the release of these funds as soon as possible.