Germany has decided to give $566 million to Iraq to help rebuild the economical backdrop, after a meeting on Thursday with Iraqi Prime Minister Haider al-Abadi in Berlin.

Noting the economical fall, German Chancellor Angela Merkel said “Germany is ready to do what it can … to stabilize Iraq in view of the big security challenges and economic challenges.”

However the budget is not structured into projects, the fiscal aid will help rebuild the infrastructures in war-torn Iraq. Merkel said that Germany is hoping to demine the towns and cities so that three million refugees may return to their homeland, according to a report by The Daily Star.

As Germany is already entangled in the refugees crisis, the pressure concerns all other European countries, which faced a heavy influx of 1.1 million refugees last year.

Merkel said that both the countries will cooperate to cut the very nerve of human trafficking, where people are lured on false pretence.

The proposed amount will help revive Iraq’s oil market in the light of the current global fall in oil prices.  It is now  around 26 euro (AU$30) per barrel, down from 96 euro (AU$110) in 2014. Iraq gets 90 percent of its revenue from oil.

During the meeting, al-Abadi expressed his disappointment on “autonomous Kurdistan’s proposed independence referendum,” in a report by DW.

“The Kurdistan region will not develop without Iraq, and Iraq must be united in all its components,” al-Abadi said. “I urge them not to go ahead with the referendum. If as they say they are not going to abide by its outcome, then why to hold a referendum?”

Despite the struggling oil prices and on-going war with Islamic State,  Kurdish leader Massoud Barzani called for non-binding referendum.”Kurdistan is part of Iraq and I hope it remains that way. Disintegration is in no-one’s interest.” said Barzani.

Merkel said that Germany never wanted to see the division of Iraq. “With all our support for the peshmerga and the Kurds (in the fight against IS) we have always made that clear.” said Merkel.