Member of Parliamentary Finance warns of the danger of borrowing from government banks to secure employee salaries

05/25 2020 12:22

Member

Baghdad today - private

Member of the Parliamentary Finance Committee Jamal Kujer warned, on Monday (25 May 2020), that the government will continue to borrow from government banks, while he stressed that these loans have interest that is not different from borrowing from other banks.

Cougar said, in an interview with (Baghdad Today), that "borrowing from government banks has benefits, as it is considered like foreign banks, but it is not true."

He added, "There are fears of continuing internal borrowing, especially as the government resorted to loans in order to pay the salaries of employees only, and issues related to the operational budget."

The member of the Parliamentary Finance explained that "this matter is not economically correct, because if a loan does not have a financial return, during the period in which the loan is paid, it is considered an error and an economic risk, and for this there is a fear of resorting to such a loan for operational issues."

The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed that the government borrowed from the Rafidain and Rashid banks and the Iraqi Trade Bank about (3) trillion dinars to pay salaries for the month of May.

He said, "The government in the month of May was able to cover only the salaries of employees, retirees and social welfare due to the lack of revenues," noting that "there is a trend towards internal borrowing to pay the salaries of workers in the state for the month of June."

Saleh stressed that "there are negotiations with international banks and banks to borrow from them to pay the deficit in the operational budget, but these negotiations need time" indicating that "in the long term and the coming months there is an intention to issue a national bond (borrowing from citizens) at a high interest rate with many concessions"

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