Facing liquidity crisis, Iraq presses for more emergency borrowing

If the Parliament does not pass a new stop-gap financing law, the government says it cannot fund basic expenses including civil servant salaries.
Facing liquidity crisis, Iraq presses for more emergency borrowing
An Iraqi graduate wearing a protective face mask stands in front of riot police during a protest against lack of jobs in Baghdad, Iraq, Sept. 17, 2020. (TEBA SADIQ/Reuters)

The Iraqi government is expected to send a controversial new emergency finance bill to parliament this week in a last-ditch attempt to pay its bills in the absence of a 2020 budget, amidst a financial crisis, pandemic, and bloated public sector workforce.

The proposed law is supposed to act as a stop-gap measure after the government withdrew the draft 2020 budget from parliament last week, which leaves the government unable to borrow to pay its bills – risking continued delays in civil servant pay checks and potentially ending budget transfers to the Kurdistan region.

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