Financial mechanism of the Ukrainian-Polish cross-border region’s development

Abstract

The author's approach to the development of a conceptual model of the financial mechanism of a cross-border region’s development is substantiated. The financial mechanism is suggested to be interpreted as a set of elements of financial support of the cross-border region, the combination of which ensures achievement of targets, synergies, and cross-border effect based on monitoring, audit, and control over the use of funds. The developed approach to forming the financial mechanism of the development of the cross-border region combines target and financial parameters and reflects the sources, tools, forms, and leverages of financial support. The main sources of financial support of the Ukrainian-Polish cross-border region are 1) Ukrainian and Polish national public funds, which may come from the State Budget, as well as from state trust funds and other public entities of the public finance sector; 2) foreign public funds: from the EU budget within the framework of European Territorial Cooperation; 3) private funds (investments), which are used to co-finance projects within the system of public-private partnership. The development of cross-border cooperation is based on the use of specific forms and tools that are differentiated depending on the hierarchical level of management (European, national, regional), forms of provision, functional orientation, methods of administration, control, monitoring, and forecasting. The following main tools for implementation of the CBC program are identified: grants, projects, and large infrastructural projects. Funding in the EU, in addition to these types, can be carried out using: budget support, contributions to trust funds, mixed forms of financing, debt relief under an internationally agreed program, financial assistance, paid external expertise, etc. It is noted that monitoring is a tool of introductory (ex-ante), intermediate (ex-mid), and final (ex-post) evaluation of the implementation of the program and development projects of the cross-border region. It is stated that funding in the EU is based on the use of budget support, contributions to trust funds, mixed forms of financing, debt relief under an internationally agreed program, financial assistance, paid external expertise, etc.