Erbil-Baghdad disputes have hindered Iraq's economic reforms

Kurdistan The European website "EU Reporter" reported in an economic and strategic report on the deterioration of the situation in Iraq's financial sector and stated that the continuation of long-standing disputes between Erbil and Baghdad over employee rights, budget shares, and management of the oil and gas file has severely reduced the confidence of companies and foreign investors.

The European report emphasizes that these financial and constitutional gaps have caused disruption in the provision of public services and instability in the process of transferring financial resources.The report also calls on political forces to implement fundamental reforms in the financial and administrative sectors as soon as possible, because no amount of foreign relations can replace the weakness of national institutions and the sluggish investment process.

The report also refers to information related to the withdrawal of PKK forces from part of their positions in the Kurdistan Region in October 2026, and states that this development can pave the way for peace and reduce the displacement of civilians following Turkish airstrikes, but it will not lead to reforms alone and requires legal guarantees.

The EU Reporter has warned that the ongoing disputes between Erbil and Baghdad over employee rights, the budget, and oil and gas have severely undermined the confidence of foreign investors, and has called on Europe to support the reform process and technical dialogue between the two sides.