FEATURES OF STATE FINANCING OF WEAPONS AND MILITARY EQUIPMENT OF THE ARMED FORCES OF UKRAINE IN CONDITIONS OF MARTIAL LAW

Abstract

The article examines the legislative framework of financing the defense of the state, reveals the place of the Armed Forces of Ukraine in the structure of the security and defense sector, and also systematizes the subjects and directions of financing the weapons and military equipment of the Armed Forces of Ukraine. Basing on a study of the upgrade status of weapons and military equipment at the enterprises of the military-industrial complex in 2017-2021, it has been found that its development, procurement, modernization and major repair involve significant financial costs, especially in the conditions of martial law and taking into account the problems associated with long-term exploitation, moral and physical obsolescence.
 The purpose of the article is to study the peculiarities of state financing of weapons and military equipment of the Armed Forces of Ukraine under martial law, as well as to find the most effective sources of financing expenditures.
 The authors have researched the sources of financing defense spending in Ukraine and conducted a comparative cost analysis with NATO countries for 2014-2022 both in absolute terms (million USD) and in relative terms (% of GDP). The sources of financing the deficit of the State Budget of Ukraine have been systematized, as well as the classification of the types of financial instruments used to cover it has been carried out (by type of financing source; by economic content; by the type of budget fund being formed; by the nature of application). The role of the National Bank of Ukraine in covering the deficit of the State Budget of Ukraine has been revealed.
 The authors have searched for ways of additional financing of weapons and military equipment costs, in particular, through the use of monetary policy instruments of the National Bank of Ukraine. It has been concluded that the most effective monetary instruments of a non-inflationary nature, which should be given priority in the conditions of martial law, are: borrowings mobilized from the placement of Ukrainian domestic government bonds and military bonds. Recommendations on the use of non-inflationary monetary policy instruments in the conditions of martial law have been proposed.