The limits of debt policy: balancing the protection of the economic rights of the population and ensuring the financial security of the state

Abstract

Problem setting. In conditions of high dependence on external lending, Ukraine faces the pressing challenge of reconciling the demands of international financial donors (regarding fiscal reforms and tax increases) with the necessity of ensuring social justice, protecting the economic rights of citizens, and developing a balanced debt policy. Analysis of recent research and publications. The issue of Ukraine’s national debt has been studied by many scholars, but the impact of excessive debt dependence on the country’s economic security and the economic rights of its population remains largely overlooked. The purpose of this article is to define the limits of the state’s debt policy in the context of ensuring a balance between fiscal stability, financial security, and the protection of the economic rights of the population. Article’s main body. The article explores the issue of defining the limits of a state’s debt policy in the context of balancing financial security, fiscal discipline, and the protection of citizens’ economic rights. Based on an analysis of Ukraine’s current public debt situation under wartime economic conditions, the study reveals the essence of debt dependency as a factor influencing economic sovereignty, budgetary stability, and social justice. It examines the suspension of fiscal rules during the war and the exceeding of debt limits established by Ukraine’s Budget Code. It is emphasized that, although such deviations are objectively justified, they pose long-term risks to the country’s financial stability. Particular attention is devoted to analyzing external debt dependency and its impact on citizens’ economic rights through the restriction of state social obligations, increased tax pressure, and rising borrowing costs. The necessity of introducing a legal mechanism for assessing the impact of debt decisions on human rights (Human Rights Impact Assessment) is substantiated as a preventive instrument against the socio-economic consequences of excessive fiscal consolidation. The authors propose the formation of a “Debt Doctrine” of Ukraine that integrates legal, economic, and social criteria for debt decision-making, focused on ensuring long-term financial sustainability. Conclusions and prospects for development. The study concludes that an effective debt policy should be based on the principles of transparency, social justice, and responsibility, ensuring both the preservation of citizens’ economic rights and the macro-financial stability of the state. The proposed approaches may serve as a foundation for restoring fiscal rules and developing a balanced system of financial governance in the post-war period.