DEVELOPMENT OF THE PUBLIC FINANCE SYSTEM AS A CONDITION INTEGRATION OF UKRAINE INTO THE EUROPEAN UNION
Authors:   Taras Shevchenko National University of Kyiv, Rozhko Oleksandr , Nesterov Yevhen ,   Taras Shevchenko National University of Kyiv
Published: August 2024

Public fi nance is a fundamental component of any country's socio-economic framework, serving as a cornerstone for the state's functionality and the provision of essential services to its citizens. The core objective of public fi nance is to effi ciently collect, allocate, and utilize monetary resources to satisfy the collective needs of society. Through public fi nance, governments are able to fund critical programs and services, including healthcare, education, social security, infrastructure, and security, thereby enabling the state to perform its functions and support national development. In addition to providing necessary services, public fi nance plays a crucial role in fostering balanced economic growth by investing in infrastructure, science, and innovation, which drives economic development and job creation. It also contributes to fi nancial stability by managing infl ation, public debt, and regulating fi scal policies. Thus, public fi nance is not only a mechanism for funding government operations but also a vital tool for managing the economy, ensuring stability, and promoting societal advancement. Scholars have explored the concept of public fi nance from various angles, leading to diff erent interpretations and components. Some view it as the economic relations involved in forming, distributing, and utilizing public sector funds, while others see it as encompassing state and local fi nances or as a system for managing public sector resources. The most widely accepted perspective defi nes public fi nance as the economic relations arising from the formation, distribution, and utilization of public sector funds, emphasizing its role as a system of fi nancial relations managed by the state to meet societal needs and ensure eff ective public service delivery. In the context of public fi nance, specifi c policy implementation models have been proposed, particularly for Ukraine, emphasizing the re-prioritization of fi nancial policy goals to ensure full support for the Armed Forces and the security and defense sectors. This shift is seen as crucial for securing victory and restoring the country's territorial integrity. Additionally, there is a call to reorient fi nancial policy towards direct administrative methods, which would enable more eff ective management of fi nancial resources in a disrupted economic environment. Moreover, it is suggested that budgetary policy during martial law should clearly defi ne priority goals, distinguishing between those requiring full fi nancing and those classifi ed as necessary but secondary. The development of Ukraine's public fi nance system is also a critical aspect of its European integration process. Aligning national legislation with European standards and reforming fi nancial management strategies are essential to meet the requirements of EU membership. This includes improving budgeting, taxation, public debt management, and ensuring transparency and control over public funds. Furthermore, European integration demands the sustainability and predictability of fi nancial resources for development programs, which is key to achieving stable economic growth and increasing investor confi dence. In conclusion, the advancement of Ukraine's public fi nance system in the context of European integration is vital for the country's future. It requires not only harmonizing legislation with European standards but also adopting new management and control principles to enhance transparency, effi ciency, and stability. Learning from the European experience in public fi nance management will be crucial for Ukraine, helping it to implement best practices, avoid potential pitfalls, and successfully prepare for EU membership.