FINANCIAL CAPACITY OF TERRITORIAL COMMUNITIES: EUROPEAN EXPERIENCE AND UKRAINIAN CASE

Abstract

The purpose of the article is to identify key financial instruments for the financial capacity of the combined territorial communities’ (ТС) enhancement in Ukraine under conditions of their sustainable development and decentralization implementation. Based on the European experience in reforming state power, it has been determined that strengthening the financial framework and competence of local self-government is an effective mechanism for stimulating economic activity, elaborating effective strategies for regional and local development. The methods of consolidation of European municipalities are as follows: stimulation of voluntary association (Czech Republic, Latvia) and administrative consolidation (Denmark, Sweden, Norway, Poland, Bulgaria). The approaches to the effectiveness assessment of territorial communities in Germany and Ukraine, which include analysis of the financial base, investment reserves, amounts of municipal investments, have been highlighted. Comparative analysis of financial capacity of the territorial communities of Ukraine, Germany, France, Poland, Romania on indicators is carried out: own income per capita; dynamics of receipts of local taxes and fees; the level of subsidy of budgets; the specific weight of expenditures on the maintenance of the management apparatus in the financial resources of TС. It has been determined that the main forms of state support of territorial communities in Ukraine are subventions, grants, transfer of state-owned objects of communal property, international technical and financial assistance, and funds of the state budget of regional development. In order to ensure the sustainable development of territorial communities in Ukraine, the introduction of new financial instruments for state support of territorial communities (community-based local development, integrated territorial investments, and green bonds) and directions of development of territorial communities has been proposed.