Iraq this week agreed to implement IMF-instigated reforms as a prelude to a possible financing deal. The ‘Staff-Monitored Program’ (SMP), aims to help Baghdad “implement a fiscal consolidation that will contain public expenditure in line with available revenue and financing, aim to reduce the non-oil primary deficit by 4% of non-oil GDP between 2014 and 2016,” IMF mission chief Christian Josz says.

The SMP includes measures to strengthen public financial management...