EROSION OF THE SOVEREIGNTY OF STATE FINANCIAL CONTROL

Abstract

The article is devoted to the analysis of state financial control as an institutional category and to testing its sovereignty under modern conditions. The author emphasizes the social significance of this sphere and notes that its essence and functional content remain the subject of continuous theoretical reflection. The purpose of the work is defined as verifying the ability of state financial control to preserve sovereignty, and the tasks as examining examples and measures of controlled use of public finances and resources. The object of research is the practice of state financial control, while the subject is the manifestations and process of sovereignty erosion in this sphere. Reference is made to constitutional norms and international acts of the United Nations, in particular the Charter of Economic Rights and Duties of States, which enshrine the principles of economic sovereignty. This provides grounds for the conclusion that state financial control must remain sovereign.

Special attention is paid to the foundations of financial cooperation under the Association Agreement and the Ukraine Facility instrument. Content analysis of the Association Agreement and the Framework Agreement shows that the issue is not only financial assistance but also concessions in the sphere of factual sovereignty, especially in matters of financial control. It is emphasized that both parties agreed to sovereignty erosion in order to achieve financial goals.

The study examines changes in the practice of state financial control institutions - government and parliament - arising from the need to comply with the conditions of the Ukraine Facility. Based on the conducted analysis, it is established that Ukraine fulfills EU requirements regarding the controlled use of funds in a manner by which sovereignty erosion may be regarded as a fact in financial practice.

For deeper understanding, the author turns to historical precedents, in particular the experience of the Ottoman Public Debt Administration (OPDA), which exemplified the loss of state sovereignty through international financial control. Parallels with the current situation suggest the repetition of historical precedents, when the conduct of military operations and limited financial capacity of a state create conditions for creditors’ interference in its sovereignty.

In conclusion, the study confirms the fact of sovereignty erosion in the sphere of state financial control, despite declared constitutional norms and principles of economic sovereignty. The author finds that there is a probability of repeating historical financial precedents, but now in our country. The EU’s developments in the foundations of financial cooperation stimulate the aspiration to learn and adopt experience, primarily in matters of protecting its own financial interests through the deployment of total control over the use of allocated funds, involving all institutions - both domestic and those of the contracting party.