№ 8/2019

Fìnansi Ukr. 2019 (8): 7–25https://doi.org/10.33763/finukr2019.08.007

PUBLIC FINANCE MANAGEMENT

KUDRJASHOV Vasyl ¹

¹SESE “The Academy of Financial Management”
OrcID ID : https://orcid.org/0000-0003-4801-3620

Application of fiscal rules on the basis of structural balance

An analysis of fiscal rules based on the structural balance in the EU is conducted. The differences between them are compared with the indicators of the general balance. It is stated that fiscal rules based on the general balance can restrain the adoption of management decisions during recession periods and allow carrying out pro-cyclical fiscal policies. The use of indicators of the structural balance makes it possible to solve such problems, as well as improve budget planning for medium-term periods. The approaches to carrying out calculations of indicators of structural deficit of the public balance are disclosed. It is concluded that the use of structural deficit indicators is of great importance for the formation of the medium-term budget policy, in particular, assessing budget sustainability and the impact of fiscal policy on aggregate demand. On the basis of, structural balance medium-term fiscal frameworks are developed, budget targets are set, and budgetary positions of the member states are determined. It is noted that the medium-term framework is aimed at observing the requirements of the state fiscal rules on the sustainability of public finances or applying measures to approximate it in case of deviations from the adopted goal. The European Commission provides member states with “minimum medium-term budgetary objectives” recommended for accounting when developing stability or convergence programs. The member states that have not yet reached the agreed medium-term goal are recommended that efforts be made to improve the structural balance of the budget. It is proposed to apply fiscal rules based on the structural balance indicators for Ukraine, which will allow using the new approaches adopted by the EU in managing budget operations in recent years.

Keywords:fiscal policy, fiscal rules, general budget balance, cyclical deficit, structural deficit, discretionary operations, medium-term fiscal framework, budgetary objectives, budget position

JEL: H61, H87

Kudrjashov V. . Application of fiscal rules on the basis of structural balance / V. . Kudrjashov // Фінанси України. - 2019. - № 8. - C. 7-25.

Article original in Ukrainian (pp. 7 - 25)

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