ERBIL, Kurdistan Region of Iraq - The Kurdistan Regional Government (KRG) has reached an agreement with the Iraqi federal government to finance the salaries of the Region's civil servants for the entirety of 2025 "without any issues,” the KRG’s finance minister announced on Monday.

“We are happy to announce that the result of lengthy negotiations… has turned out positively, and we were able to reach an agreement with the federal finance ministry on the issue of the Kurdistan Region’s civil servant salaries. We have reached an outcome to finance the salaries of the Region’s employees for 2025 without any issues,” KRG Finance Minister Awat Sheikh Janab told reporters.

Janab led a top KRG delegation for negotiations with the Iraqi finance ministry in recent days. The meetings were aimed at resolving outstanding issues between Erbil and Baghdad regarding the Region’s budget share and civil servant salaries.

The minister emphasized that the ninth KRG cabinet has, from day one, prioritized resolving outstanding issues between Erbil and Baghdad. “Fortunately, that policy achieved results today.”

“Salary issues for 2025 are over… We hope this is the last time the salaries of civil servants needs to be in the news,” he said, adding that financing January salaries should start in the next few days.

Salaries of the Kurdistan Region’s civil servants and the Region’s share of the federal budget have long been a point of contention between the federal and regional governments. As of the time of this writing, the KRG has not been able to pay its civil servants their December 2024 salaries, citing Baghdad’s refusal to send the agreed upon amount for said salaries.

Years of conflict and unresolved issues between Erbil and Baghdad, and economic sanctions and pressure on Erbil by federal authorities, have pushed employees in the Region to live from paycheck to paycheck.

The agreement between Erbil and Baghdad comes a day after the Iraqi parliament passed a bill to amend Articles of the federal budget law relating to the Kurdistan Region’s oil, paving the way for the resumption of the Region’s oil exports to the international market, nearly two years after they were halted. The halt in oil exports had exacerbated the KRG’s financial issues.

In January, Kurdistan Region Prime Minister Masrour Barzani led an irregular meeting of the Council of Ministers with Kurdish ministers in the federal government and heads of parliamentary blocs in the Iraqi parliament, aimed at discussing the next steps for the Kurdish representation in the political process in Baghdad amid ongoing budget issues.

Barzani tasked the Kurdish federal ministers with informing Baghdad that Erbil needs guarantees that 2025 salaries will be paid without any issues and demands its full share of the budget starting 2026, warning of a firmer stance otherwise.