TRANSFORMATION OF FISCAL SOVEREIGNTY UNDER THE PRESSURE OF GLOBAL AND GEOPOLITICAL FACTORS

Abstract

The article presents a theoretical and methodological study how a state’s fiscal sovereignty is being transformed under contemporary globalization dynamics and geopolitical shocks. It demonstrates that, in the XXI century, the classical paradigm of fiscal sovereignty as an absolute and stable autonomy in designing tax and budget policy is no longer fully adequate. Instead, fiscal sovereignty has become a dynamic category in which the government’s effective policy space is closely linked to conditions in global financial markets, the availability of external liquidity, and the scale of international commitments. Particular attention is given to a comparative analysis of three systemic crises that served as turning points in rethinking fiscal independence: the 2008 global financial crisis, the COVID-19 pandemic, and russia’s full-scale war against Ukraine. Using evidence from Ukraine, EU, and USA, the article explicates the mechanisms through which national fiscal systems adapted to extreme conditions. It shows how these events fundamentally altered the capacity of governments to act autonomously. The study systematizes the principal channels through which external forces shape domestic fiscal policy. These include high capital mobility, intensified tax competition, the expansion of supranational fiscal rules, stringent conditionality associated with the IMF and the World Bank, and the terms governing EU macro-financial assistance. The findings suggest that fiscal sovereignty is evolving from a predominantly formal, legal notion of autonomy toward a practical capability to maintain control over public finances under tight external constraints. The article further argues that, under global threats, the strategic security of public finance is better supported not by fiscal isolationism, but by collective security arrangements and international financial solidarity. In this context, institutional capacity to reconcile internal socio-economic priorities with the external requirements of global regulation becomes the key criterion of effective state sovereignty.