CONCEPTUAL FOUNDATIONS FOR THE DEVELOPMENT OF UKRAINE’S ECONOMIC LEGISLATION IN THE CONTEXT OF EUROPEAN INTEGRATION: FINANCIAL-BUDGETARY RELATIONS AND FINANCIAL CONTROL

Abstract

The subject of the present study is the conceptual, legal and institutional framework for the development of Ukraine's financial-budgetary legislation in the context of European integration. The study's primary focus is on the transformation of financial-budgetary relations, the modernisation of financial control, the development of public finance governance, and the gradual adaptation of national mechanisms to the standards of the European Union. Particular focus is given to the relationship between medium-term budget planning, performance-based spending, managerial accountability, risk-based financial control, digital transparency, international financial assistance, external auditing and safeguarding public and European financial interests. Methodology. The research is based on a combination of comparative legal, systemic, institutional, financial law and public governance methods. The analysis integrates the Budget Code of Ukraine, national strategies for reforming public finance management, the EU acquis in the field of financial control, Regulation (EU) 2024/792 establishing the Ukraine Facility, European Commission evaluations and OECD approaches to integrity, auditing and public financial management. This methodological approach enabled the interdependencies between budget planning, financial control, institutional responsibility, fiscal risk management, digital traceability and the effectiveness of public expenditure to be identified. The work aims to define conceptual directions for the further development of Ukraine’s financial and budgetary legislation within the context of European integration, and to substantiate an integrated model of public finance governance. This model is based on medium-term planning, performance evaluation, preventive control, institutional accountability and digital transparency. The article demonstrates that Europeanisation in this area should not be limited to the formal alignment of legal norms, but should instead result in the functional transformation of the entire public financial management system. The results of the study show that Ukraine’s financial and budgetary legislation is gradually shifting towards a broader system that combines legality, efficiency, effectiveness, risk management and responsibility for financial consequences, rather than focusing solely on the legality of expenditure. Medium-term budget planning, performance audits, managerial accountability, external public audits and preventive, risk-based controls are becoming increasingly important elements of this transformation. The study also demonstrates that digital systems such as ProZorro and DREAM enhance the traceability of public funds, expand opportunities for public oversight, and establish the foundation for integrating procurement, public investment, budget planning, and financial monitoring within a unified information environment. This text focuses on the management of international financial assistance. The Ukraine Facility shows that access to substantial European financing is linked to certain requirements regarding internal control, auditing, the prevention of fraud and corruption, the protection of the financial interests of the European Union, and accountability for the use of resources. Based on this, the article highlights the importance of developing a unified model for managing national budget resources, international assistance and financial risks. Such a model should incorporate medium-term and performance-oriented planning, risk-based financial control, and the institutional accountability of public authorities for the consequences of their decisions. It should also include the financing of preventive measures, the digital traceability of budget resources, and the stronger integration of audit results into subsequent budget decisions. Conclusion. In the context of European integration, the development of Ukraine’s financial-budgetary legislation should be based on the formation of an integrated, results-oriented, risk-sensitive and institutionally accountable system of public finance governance. Transitioning from controlling the formal use of funds to controlling results, risks, and long-term financial consequences signifies a profound shift in the legal nature of financial control. Effective Europeanisation requires coordination between budget planning, internal control, external auditing, digital transparency, public investment management and international financial assistance. The future development of this model hinges on Ukrainian legislation's ability to align financial authority with responsibility for the legality and economic impact of expenditure, thereby bolstering fiscal sustainability, reconstruction capacity, and Ukraine’s preparedness for comprehensive participation in the European Union's financial mechanisms.