STRENGTHENING FINANCIAL SECURITY OF UKRAINE THROUGH IMPROVING FISCAL AND MONETARY POLICIES COORDINATION

Liudmyla Shemaieva; Yuliia Kasperovych; Dmytro Gladkykh

Liudmyla Shemaieva
Yuliia Kasperovych
Dmytro Gladkykh

Keywords: fiscal security, fiscal policy, monetary policy, coordination, institutionalism, stimulation, constraint, public debt, shadow economy, corruption fiscal planning, fiscal transparency, liquidity management, BEPS plan, information technology.

Abstract

The challenges, risks and threats to the economic security are largely concentrated in its financial component. The article substantiates the directions of improving fiscal and monetary policy coordination in Ukraine in order to strengthen financial security in conditions of increasing the negative impact of the debt factor.

The modern practice of influencing fiscal policy on the monetary one is investigated, and vice versa. The transmission mechanism of stimulating fiscal and monetary policy measures in Ukraine is complicated by general political and specific financial constraints. In Ukraine, the interconnected stimulating effect of monetary and fiscal policies on economic growth was most often distorted by the shadow economy and corruption. Therefore, the mechanism of coordination of the instruments of the two politicians has not always been correct and timely. Political cycle in economic policy is still not possible to get rid of.

Given the fiscal and monetary constraints, first and foremost, the indicator of public debt, the application of financial incentive measures in Ukraine is currently extremely limited. Under such conditions, institutional measures to improving the coordinating mechanism of fiscal and monetary policy will contribute to strengthening financial security are proposed, in particular: decreasing public debt to economically secure boundaries; developing medium-term fiscal planning; increasing fiscal transparency; improving liquidity management of state and local budgets, and a single treasury account; implementation of the BEPS plan to counteract the outflow of capital; establishing of regular interagency functional cooperation; increasing the forcefulness of existing fiscal and monetary incentives; the expansion of the practice of applying advanced information technologies; harmonization of tax and customs legislation, development of state financial control methods in the European integration reform vector.

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