Thoughts on the Federal/KRG deal

In response to questions of how significant the deal is and whether this is the end of confrontation between Baghdad and Erbil:

The deal itself is especially significant because of the timing. The PM promised when forming the new government that he would resolve the dispute with the KRG within 3 months and he has managed that. The Baghdad-KRG dispute has been going on for a number of years but with the threat the whole country is facing it was essential that a deal was struck in order to reduce financial pressures and also present a united political and military front against daesh. Abadi has shown that his government can get things done and the Kurds have shown that they are willing to compromise in order to continue as part of the Federal Iraq.

This is not the end of the confrontation because there are several outstanding issues between the federal and regional government, and even the oil export deal has some details to be confirmed. This does reduce tensions and also is the most significant issue that could have been resolved at this time, so it has set the right tone for further engagement to resolve other disagreements. Both sides have gained and both sides are more optimistic going forward, so a significant step but not the final one.

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