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9.6  |  27 June 2007 to April 2008
on detainees, while passage of these laws still leaves much to be done before
these issues are resolved it does represent a significant step which might boost
reconciliation efforts …”
797.  Mr Prentice commented that the political atmosphere in the run up to the votes was
“poisonous but gave way to relief and pride when all three Bills were passed and the
CoR went back on holiday”.386
798.  The passing of the 2008 Budget (60 trillion Iraqi Dinars, then equivalent to
US$50bn) followed a protracted battle between a Dawa-led Arab nationalist faction
and the Kurdish alliance, in which the two main sticking points were the funding of the
Peshmerga and the Kurdish Regional Government’s (KRG) share of revenues. A further
postponement of a decision on funding the Peshmerga and agreement that the KRG
should retain its existing 17 percent revenue share, with a census conducted later in the
year, allowed the Budget to pass.
799.  Mr Miliband issued a statement welcoming the approval of the legislation, as “three
important and positive steps for Iraq” which would release “record resources for services
and reconstruction”, lay “the foundation for greater Sunni reintegration” and move Iraq
closer towards a new round of provincial elections.387 The statement continued:
“There is now a clear desire on the part of Iraq’s political leaders to reach out to
each other in a spirit of compromise, and use the space created by the improved
security environment to make real progress on reconciliation. I hope this positive
atmosphere continues. Political reconciliation is key to Iraq’s development as a
secure and stable country.”
800.  The Iraq Strategy Group discussed “the strategy paper” again on 14 February.388
Mr McDonald underlined that the paper was “too ambitious, not UK-centric enough, and
too long” and that it should not presume engagement beyond spring 2009. More work
was needed before it could be put to Ministers. It was agreed to split the paper into two:
one which dealt with the medium term (to spring 2009) and another dealing with the
longer term, including future legal arrangements.
801.  Those papers would be discussed again at the ISG and then by a Ministerial
trilateral meeting on 4 March and NSID(OD) in early April, which would also consider
force level options.
802.  Mr McDonald asked that three clear options should be presented to Ministers:
maintain the status quo at around 2,800;
386  eGram 6531/08 Baghdad to FCO London, 20 February 2008, ‘Iraq: 2008 Budget Passed’.
387  Email Hickey to Iraq Group [junior official], 15 February 2008, ‘Iraq: Passage of Budget, Amnesty and
Provincial Powers Laws: Statement and Personal Message’.
388  Minute Cabinet Office [junior official], 15 February 2008, ‘Iraq Strategy Group, 14 February’.
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