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Current trends in debt policy of city councils and directions of its improvement
The need to rethink the role of urban debt policy in accordance with the growing needs of urban communities and their sustainable socio-economic development is identified. In Ukraine, the legal preconditions for the formation of cities' own debt policy and the implementation of borrowing in both domestic and foreign nancial markets. The current state of local budgets and decentralization processes only highlight the need for cities to develop debt policy.
The formation of the institution of local borrowings in Ukraine is analyzed and an in-depth analysis of borrowings of city councils in 2014-2019 is carried out with the definition of three periods: 2014-2015 - increase in borrowed funds, but such borrowings were formed mainly due to debt activity of Kyiv City Council domestic local bonds; 2016–2017 - decrease in the amount of borrowed funds, which occurred under the inÀuence of macroeconomic, political and fiscal instability; 2018-2019 - resumption of debt activity of city councils that had experience of borrowing in the previous, relatively analyzed, period and diversification of forms of local borrowing.
Based on the cluster analysis, the main characteristics of the modern debt policy of city councils of Ukraine, which is based on the di൵erentiation of city councils-borrowers, are determined. The main borrower remains the Kyiv City Council (the share was about 67%), the activity of borrowings was noted in the following city councils: Zaporizhia, Dnipro, Lviv, Odessa, Ivano-Frankivsk. It is established that the debt policy of city councils is based on raising funds from NEFCO, state-owned banks and the Ministry of Finance of Ukraine.
Improving the debt policy of city councils of Ukraine should be based on the synergy of actions of central government agencies: (Ministry of Finance of Ukraine, Debt Agency of Ukraine, NBU, National securities and stock market commission (NSSMC)Financial Control Ofice, etc.) and city councils. Vectors for improving the debt policy of city councils should be an integral part of the Strategy for the Development of the Financial Sector of Ukraine until 2025 and meet its key strategic goals and directions.
Key words: debt policy, local debt, local borrowings, domestic local government bonds, external local government bonds, fiscal decentralization.
The formation of the institution of local borrowings in Ukraine is analyzed and an in-depth analysis of borrowings of city councils in 2014-2019 is carried out with the definition of three periods: 2014-2015 - increase in borrowed funds, but such borrowings were formed mainly due to debt activity of Kyiv City Council domestic local bonds; 2016–2017 - decrease in the amount of borrowed funds, which occurred under the inÀuence of macroeconomic, political and fiscal instability; 2018-2019 - resumption of debt activity of city councils that had experience of borrowing in the previous, relatively analyzed, period and diversification of forms of local borrowing.
Based on the cluster analysis, the main characteristics of the modern debt policy of city councils of Ukraine, which is based on the di൵erentiation of city councils-borrowers, are determined. The main borrower remains the Kyiv City Council (the share was about 67%), the activity of borrowings was noted in the following city councils: Zaporizhia, Dnipro, Lviv, Odessa, Ivano-Frankivsk. It is established that the debt policy of city councils is based on raising funds from NEFCO, state-owned banks and the Ministry of Finance of Ukraine.
Improving the debt policy of city councils of Ukraine should be based on the synergy of actions of central government agencies: (Ministry of Finance of Ukraine, Debt Agency of Ukraine, NBU, National securities and stock market commission (NSSMC)Financial Control Ofice, etc.) and city councils. Vectors for improving the debt policy of city councils should be an integral part of the Strategy for the Development of the Financial Sector of Ukraine until 2025 and meet its key strategic goals and directions.
Key words: debt policy, local debt, local borrowings, domestic local government bonds, external local government bonds, fiscal decentralization.
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4. On Approval of the Procedure of Local Borrowing: Resolution of the Cabinet of Ministers of Ukraine. № 110. 16.02.2011. Available at: https://zakon.rada.gov.ua/laws/show/207-2003-%D0%BF (Accessed 18.01.2020).
5. Didenko, L.V., Golovenko, I.P. (2014). Local loans as a source of attracting fnancial resources to local authorities: a collection of scientifc papers of the National University of the State Tax Service of Ukraine. No 2, рр. 57–66.
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9. Piontko, N.B. (2016). Municipal borrowing as a source of investment development in Ukrainian regions. Scientifc Bulletin of Kherson State University. Economic Sciences. No 17(3), рр. 121–127.
10. Zolotukhin, Ye.V. (2017). Comparative analysis of foreign experience of functioning of local borrowing markets: lessons for Ukraine. Investment: practice and experience, 2017. No 11, рр. 55–60.
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12. Local debt and local guaranteed debt. Debt policy. Ministry of Finance of Ukraine. Available at: https://www.mof.gov.ua/uk/miscevij-borg-ta-miscevij-garantovanij-borg
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14. Budget 2016: Statistical collection. Available at: http://195.78.68.18/minfin/control/uk/publish/archive/main?cat_id=68447.
15. Ofcial exchange rate of hryvnia to foreign currencies (average for the period). Ofcial Internet representation of the National Bank of Ukraine. Available at: https://bank.gov.ua/markets/currency-market.
16. Gross domestic product. State Statistics Service of Ukraine. Available at: http://www.ukrstat.gov.ua/
17. Demographic and social statistics. State Statistics Service of Ukraine. Available at: http://www.ukrstat.gov.ua/.
18. Matkovsky, S.O., Galkiv, L.I., Grinkevich, O.S., Sorochak, O.Z. (2009). Statistics: a textbook. Lviv: New World–2000. 430 р.
19. Budget Code of Ukraine dated 08.07.2010 № 2456-VI. Available at: https://zakon.rada.gov.ua/laws/show/2456-17. (Accessed 18.01.2020).
20. Past Self-Restoration in Ukraine: Law of Ukraine of May 21, 1997 № 280/97-VR. Available at: https://zakon.radagov.ua/laws/show/280/97-%D0%B2%D1%80. (Accessed 18.01.2020).
21.On securities and stock market: Legislation of Ukraine dated 23.02.2006 № 3480-IV. Available at: https://zakon.rada.gov.ua/laws/show/3480-15. (Accessed 18.01.2020).
22. On the special destiny of human rights, the state of debt and the debt of the world: Legislation of Ukraine dated 19.05.2015, № 436-VIII. Available at: https://zakon.rada.gov.ua/laws/show/436-19. (Accessed 18.01.2020).
23. On approval of the Local Borrowing Procedure: Resolution of the Cabinet of Ministers of Ukraine. 16.02.2011. № 110. Available at: https://zakon.rada.gov.ua/laws/show/207-2003-%D0%BF. (Accessed 18.01.2020).
24. Lyuta, O.V., Pigul, N.G. (2014). Municipal borrowings as a source of formation of fnancial resources of local budgets in Ukraine. Financial and credit activities: problems of theory
and practice: materials of the II International. scientifcpractical conf. Kharkiv. September 25-26, 2014. Available at: http://dspace.uabs.edu.ua/jspui/handle/ 123456789/12509.
25. Boyko, S.V. (2015). Municipal bonds as a tool to attract funds to local budgets in terms of fnancial decentralization. Economy. Finances. Right. No 8(2), рр. 21–24.
26. Sinyutka, N.H. (2016). NG Formation and implementation of municipal debt policy in Ukraine: dis. ... cand. econ. Science: 08.00.08. Ternopil. 221 p.
27. NEFCO. Financing green greetings projects. Available at: https://www.nefco.org/%D0%BF%D1%80%D0%BE-%D0%BD%D0%B5%D1%84%D0%BA%D0%BE/.
28. Ukraine's pink fnancial sector strategy until 2025. Available at: https://bank.gov.ua/about/refactoring/developstrategy
2. Budget 2018: Statistical Summary. Available at: https://www.mof.gov.ua/uk/statistichnij-zbirnik.
3. Monthly report on implementation of the State Budget of Ukraine for January-December 2019. Available at: https://www.treasury.gov.ua/ua/fle-storage/misyachnij-zvit-pro-vikonanny....
4. On Approval of the Procedure of Local Borrowing: Resolution of the Cabinet of Ministers of Ukraine. № 110. 16.02.2011. Available at: https://zakon.rada.gov.ua/laws/show/207-2003-%D0%BF (Accessed 18.01.2020).
5. Didenko, L.V., Golovenko, I.P. (2014). Local loans as a source of attracting fnancial resources to local authorities: a collection of scientifc papers of the National University of the State Tax Service of Ukraine. No 2, рр. 57–66.
6. Yushko, S.V., Zolotukhin, Ye.V. (2016). Institute of local borrowing in Ukraine: state and problems functioning. Bulletin of the Odessa National University. Series: Economics. Vol. 21, no 10, рр. 114–119.
7. Maksymchuk, O. (2019). Local borrowing as a source of capital expenditures for local budgets. The world of fnance. No 2, рр. 98–108.
8. Kvasnytsia, O. (2015). Practice and problems of local borrowing in Ukraine. The world of fnance. No 4, рр. 104–116.
9. Piontko, N.B. (2016). Municipal borrowing as a source of investment development in Ukrainian regions. Scientifc Bulletin of Kherson State University. Economic Sciences. No 17(3), рр. 121–127.
10. Zolotukhin, Ye.V. (2017). Comparative analysis of foreign experience of functioning of local borrowing markets: lessons for Ukraine. Investment: practice and experience, 2017. No 11, рр. 55–60.
11. Syniutka, N. (2015). Trends municipal debt policy in Ukraine. Economist. No 12, рр. 25–29.
12. Local debt and local guaranteed debt. Debt policy. Ministry of Finance of Ukraine. Available at: https://www.mof.gov.ua/uk/miscevij-borg-ta-miscevij-garantovanij-borg
13. Register of local borrowings and local guarantees. Ministry of Finance of Ukraine. Available at: http://195.78.68.18/minfin/control/uk/publish/archive/main?cat_id=68447.
14. Budget 2016: Statistical collection. Available at: http://195.78.68.18/minfin/control/uk/publish/archive/main?cat_id=68447.
15. Ofcial exchange rate of hryvnia to foreign currencies (average for the period). Ofcial Internet representation of the National Bank of Ukraine. Available at: https://bank.gov.ua/markets/currency-market.
16. Gross domestic product. State Statistics Service of Ukraine. Available at: http://www.ukrstat.gov.ua/
17. Demographic and social statistics. State Statistics Service of Ukraine. Available at: http://www.ukrstat.gov.ua/.
18. Matkovsky, S.O., Galkiv, L.I., Grinkevich, O.S., Sorochak, O.Z. (2009). Statistics: a textbook. Lviv: New World–2000. 430 р.
19. Budget Code of Ukraine dated 08.07.2010 № 2456-VI. Available at: https://zakon.rada.gov.ua/laws/show/2456-17. (Accessed 18.01.2020).
20. Past Self-Restoration in Ukraine: Law of Ukraine of May 21, 1997 № 280/97-VR. Available at: https://zakon.radagov.ua/laws/show/280/97-%D0%B2%D1%80. (Accessed 18.01.2020).
21.On securities and stock market: Legislation of Ukraine dated 23.02.2006 № 3480-IV. Available at: https://zakon.rada.gov.ua/laws/show/3480-15. (Accessed 18.01.2020).
22. On the special destiny of human rights, the state of debt and the debt of the world: Legislation of Ukraine dated 19.05.2015, № 436-VIII. Available at: https://zakon.rada.gov.ua/laws/show/436-19. (Accessed 18.01.2020).
23. On approval of the Local Borrowing Procedure: Resolution of the Cabinet of Ministers of Ukraine. 16.02.2011. № 110. Available at: https://zakon.rada.gov.ua/laws/show/207-2003-%D0%BF. (Accessed 18.01.2020).
24. Lyuta, O.V., Pigul, N.G. (2014). Municipal borrowings as a source of formation of fnancial resources of local budgets in Ukraine. Financial and credit activities: problems of theory
and practice: materials of the II International. scientifcpractical conf. Kharkiv. September 25-26, 2014. Available at: http://dspace.uabs.edu.ua/jspui/handle/ 123456789/12509.
25. Boyko, S.V. (2015). Municipal bonds as a tool to attract funds to local budgets in terms of fnancial decentralization. Economy. Finances. Right. No 8(2), рр. 21–24.
26. Sinyutka, N.H. (2016). NG Formation and implementation of municipal debt policy in Ukraine: dis. ... cand. econ. Science: 08.00.08. Ternopil. 221 p.
27. NEFCO. Financing green greetings projects. Available at: https://www.nefco.org/%D0%BF%D1%80%D0%BE-%D0%BD%D0%B5%D1%84%D0%BA%D0%BE/.
28. Ukraine's pink fnancial sector strategy until 2025. Available at: https://bank.gov.ua/about/refactoring/developstrategy
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