Baghdad sends Erbil $210m, but KRG doesn't know what it's for – spokesman

ERBIL, Kurdistan Region – The Kurdistan Regional Government has not been notified about the purpose of the $210 million transferred from the Central Bank of Iraq to its branch in Erbil, the KRG's spokesperson told reporters on Thursday.

Safeen Dizayee said the KRG does not know whether or not the transferred 250 billion Iraqi dinars has been sent to pay the salaries of Kurdish state employees, who are waiting to receive payment while Baghdad conducts a payroll audit.

The KRG's Finance Ministry said in a statement on Thursday that they have no direct relations or authority over the Erbil branch of the Central Bank of Iraq, explaining that the ministry did not receive the funds.

It added that they will inform the people of Kurdistan if they receive any monies from the Iraqi government.

Masud Haidar, a Gorran MP of the Iraqi parliament, told Rudaw the Iraqi government sent the money to pay the salaries of Kurdish employees in the public sector, particularly those working in health and education.

A source from the Kurdish Financial Ministry also confirmed then the money transfer, but added that they have yet to receive orders from Baghdad on whether to spend it.

The money is deposited in the branch office of the Central Bank of Iraq in Erbil. 

Baghdad did not communicate with Erbil "officially" about the transfer of the money, Dizayee said, as he took part in an event in Erbil to commemorate the victims of the twin attacks that struck the city on February 1, 2004. 

"There has been no clarification from the federal government regarding the amount of the money that was transferred from the Federal Bank of Iraq to the branch of the Central Bank of Iraq in Erbil," Dizayee said. "Is it for the salaries? Or a mere bank transfer between the banks to manage their operation," he added.

The Iraqi government has vowed to pay the salaries of Kurdish state employees once the central government audit is complete. The audit is now being conducted for the health and education sectors, which have the largest number of employees after the Kurdish Ministry of Peshmerga. 

Baghdad cut the Kurdish share of the Iraqi budget, including state salaries, in early 2014 in response to Kurdish plans to export oil to the international market independently of central government. 

The budget cut, coupled with a sharp drop in oil prices and the cost of fighting the war against ISIS, contributed to the ongoing financial crisis, which has made it difficult for the Kurdish government to pay state salaries in full or on time.

Kurdish officials say the KRG lost half of its oil revenues when the oil fields in Kirkuk were taken by Iraqi forces on October 16.

Both Erbil and Baghdad are now in talks to hammer out an oil-for-budget mechanism that may secure the resumption of the KRG's share of the Iraqi budget in return for handing over the export of oil produced in the Kurdistan Region to the Iraqi government. An agreement has not yet been reached.