PUBLIC FINANCE MANAGEMENT

EHLERS Gerd ¹

¹ German International Cooperation (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Germany)

Public debt management: tasks, objectives, participants

Public Debt Management is an important direction of activity of the Ministry of Finance, as the state is affected by the financial market, is the participant in this area and feels the market changes. Public debt management is its own ""window to the market” for the government. The lower estimate of the interest expenses’ volume could be explained by better expectations from the parliament and the government. Overestimated value of such expenses is viewed more as a sign of prudence in budget planning and at the same time forms a specific buffer when the state budget is executed. The same concerns the medium-term planning in interest expenses. The existence of such a buffer that protects against risks is well established in the mid- and long-term planning. Significant impact that public debt management may have on the budgeting and distribution, drives the need for a clear legal foundation, which should leave enough space for the market-oriented current activity. This foundation can exist in the form of permanent, legislated basic principles (in Germany — The Federal law on debt); other important details, including numerical targets for public debt management can be regulated in the annual budget law. The Authority of public debt management is not only a participant of the financial market, which operates on it with large amounts of capital, but also a representative of the State in this market. Therefore, the actions of this body should be characterized by greater reliability than those expected from each particular market participant. However, the highest degree of transparency in the public debt management should be provided. Public debt management should be aimed at ensuring the continued high liquidity of government bonds.

Keywords:public debt, objectives of public debt management, planning of interest expenditure, liquidity management, money market, capital market, credit authority, instruments for the loan, securities, government borrowing, debt portfolio, transparency, contr

JEL: H30, H50, H60, H63

Ehlers G. . Public debt management: tasks, objectives, participants / G. . Ehlers // Фінанси України. - 2014. - № 1. - C. 7-21.