Disagreement between Iraq’s central government and Erbil on the budget bill for the year 2021 has prompted the northern Sulaymaniyah province to "break away" from northern Iraq’s Kurdish Regional Government (KRG).
The dispute over the KRG's 12.67% share of the Iraqi budget and the issue of oil revenues delayed the approval of the country's 2021 budget in the Iraqi parliament.
The Iraqi central government wants the KRG to deliver 250,000 barrels of crude oil a day to Baghdad.
Erbil administration’s efforts to persuade the Shia and Sunni groups in Baghdad to increase its share of the budget have also failed.
Shia political parties in the parliament has put pressure on the government to urge Erbil to deliver all its oil and custom revenues to the central government, a demand rejected by the KRG.
The Iraqi federal government had cut the KRG employees' salaries after it said the KRG had failed to abide by a 2019 agreement under which the KRG would deliver 250,000 barrels of crude oil per day to Baghdad.
After the fall of the Saddam Hussein regime in 2003, the KRG's share of the Iraqi budget was 17%, but Baghdad cut it to 12% in 2017 after tension with the region following a controversial referendum.
A delegation headed by the KRG Deputy Prime Minister, Qubad Talabani, went to Baghdad on Monday to resume negotiations on the 2021 budget.
In case the parties fail to agree on the budget and oil revenues, Sulaymaniyah wants to negotiate directly with Baghdad, independently from the KRG, to solve its financial problems.
In that case, Sulaymaniyah will deliver its oil revenues directly to the central government, and Baghdad in return will pay the salaries of civil servants in the province.