A clash over budget transfers is the latest flashpoint in a bitter dispute between Ethiopian federal authorities and Tigray region’s government. Addis Ababa sees a September regional election Tigray held despite a federal poll postponement as unlawful and consequently plans to redirect funding away from Tigray’s executive, infuriating regional leaders. The standoff could trigger a damaging conflict that may even rip the Ethiopian state asunder. Federal rulings have authorised military intervention in Tigray, which boasts its own large regional security force. The worsening dispute is only one crisis among many rocking Ethiopia’s troubled transition. Both sides should embrace comprehensive dialogue. To kickstart such a process, the federal government should suspend the budgetary measures for now and Tigray should water down its preconditions for talks, particularly that all jailed leaders must participate and a transitional government assume power.