EVOLUTION OF FISCAL REGULATION MECHANISMS IN THE EU AND THEIR QUASI-NORMATIVE INFLUENCE ON NATIONAL BUDGET POLICY

Abstract

The article is devoted to examining the evolution of fiscal regulation mechanisms in the European Union and identifying their quasi-normative influence on the formation and implementation of budgetary policy in EU Member States and countries pursuing European integration. The study analyzes the institutional foundations of EU fiscal governance, including the excessive deficit procedure, medium-term budgetary objectives, expenditure rules, and mechanisms for monitoring macroeconomic imbalances. Particular attention is paid to the transformation of these instruments in response to financial crises, pandemic shocks, and geopolitical challenges, which have intensified the role of supranational fiscal coordination.

It is shown that the recommendations and guidelines issued by the European Commission and the Council of the European Union, despite lacking formally binding legal force, increasingly function as de facto fiscal benchmarks. Non-compliance with these benchmarks may lead to reputational costs, enhanced surveillance, or restricted access to EU financial support instruments. As a result, advisory tools are gradually converging with regulatory mechanisms, strengthening their practical impact on national fiscal decision-making.

The article identifies the key channels through which EU fiscal mechanisms influence Ukraine’s budgetary policy, particularly in the context of meeting structural benchmarks under the Ukraine Facility and implementing reforms supported by the EU4PFM program. Special attention is given to the harmonization of Ukrainian tax legislation with EU standards, the introduction of measures to counter tax base erosion and profit shifting, and the deployment of digital solutions in fiscal administration and budgetary oversight.

The results of the study make it possible to generalize current trends toward the hybridization of advisory and regulatory instruments within modern fiscal management systems. It is concluded that the quasi-normative influence of EU fiscal mechanisms contributes to improving transparency, predictability, and sustainability of national budgetary policy, while simultaneously reshaping the balance between fiscal sovereignty and supranational coordination. The findings are particularly relevant for countries undergoing fiscal transformation in the process of European integration.