At a Glance

• KRG Finance teams reached a mutual understanding with federal government to secure Kurdistan's 2027 allocations.
• The KRG delegation returns to Erbil today and will revisit Baghdad next week for further talks.
• Erbil's core demands focus on securing payrolls, lifting the 2014 hiring freeze, and restoring promotions.

The technical delegations from the Kurdistan Region and Iraqi ministries of finance reached a positive understanding on Thursday on securing the Region’s financial allocations in the draft 2027 budget law.

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Key Statement and Focus Area

• A member of the KRG negotiating delegation told Channel 8 that today’s talks with the Iraqi side “progressed very well.”
• The five-hour meeting aimed to resolve financial disputes before the draft text is forwarded to the Iraqi Council of Ministers and Parliament.

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Speaking to Channel8 following the meeting in Baghdad, a member of the KRG delegation stated that a strong mutual understanding was established to secure all of the Kurdistan Region's demands and entitlements within the 2027 draft budget before it is forwarded to the Council of Ministers and Parliament.

The official noted that they are returning to Erbil today and are scheduled to revisit Baghdad next week to initiate a new round of negotiations.

The Kurdistan Region’s official proposals for the 2027 budget center on securing key civil service and financial rights.

Crucially, Erbil is demanding absolute guarantees for the full, timely transfer of public sector salaries, alongside dedicated funds to lift the 2014 freeze on official public recruitment.

Additionally, the proposal calls for restoring civil service promotions halted since 2019, regularizing all contract teachers and staff, and clearing backlogged pension payments.

The KRG is also pushing to align the salaries and benefits of Peshmerga forces, political prisoners, families of martyrs, and citizens with special needs directly with federal government standards.

FYI

The latest talks represent the third round of budgetary discussions for the KRG technical delegation in the federal capital. 

The Erbil-Baghdad relationship has long been strained by disagreements over budget allocations and civil service salaries, heavily impacted by ongoing friction over oil sales and revenue distribution. By negotiating for hiring and advancement funds, the KRG aims to undo ten years of austerity measures. 

Officials from both sides are now working to resolve outstanding issues ahead of the fiscal deadline. 

During last week's session, the KRG Council of Ministers rejected a federal decision capping the Kurdistan Region’s population share at 12.68% instead of the census-approved 14.14%. 

Consequently, the Council directed its negotiating team to persist with Baghdad talks to guarantee the Region’s constitutional entitlements in the 2027 federal budget. 

KRG leadership emphasized that the upcoming budget law must strictly adhere to the constitution and federal laws to ensure a fair financial share.

Meanwhile, the Iraqi Ministry of Finance has expressed a willingness to accommodate the KRG critical administrative demands.

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