FINANCIAL MECHANISMS OF CROSS-BORDER COOPERATION AND UKRAINE'S POSITION IN THE EUROPEAN ECONOMIC AREA

Abstract

The article explores financial mechanisms of cross border cooperation in the Carpathian macro region and examines the position of Ukraine in the European economic space through the lens of access to EU instruments. The relevance of the study derives from growing disparities between EU member states and Ukraine in terms of participation in cohesion policy funds and sectoral programmes, which directly affect the development trajectories of border regions and their ability to benefit from European integration. The research applies comparative and institutional analysis, systematization of EU legal and programming documents, and case study examination of selected initiatives under Interreg, LIFE, Horizon Europe, pre accession instruments and European Investment Bank facilities. Special attention is paid to programmes involving Ukrainian border regions and to the role of local public finances in meeting co financing requirements. The findings systematize the main financial instruments available to EU Carpathian regions and to Ukraine, map their thematic focus and access conditions, and reveal structural asymmetries in terms of funding volumes, eligibility and administrative capacity. The study highlights that Ukrainian Carpathian oblasts remain dependent on a narrower set of instruments with higher relative co financing burdens and greater exposure to macro financial and currency risks. At the same time, cross border cooperation programmes and Ukraine’s association with key EU initiatives increasingly integrate Ukrainian actors into European networks and prepare them for future participation in cohesion policy. The paper identifies the critical role of local budgets and interbudgetary transfers in mobilizing co financing, underscores gaps in project management and financial planning skills at local level, and outlines how these gaps limit the absorption of available external resources. The practical value of the article lies in providing a structured overview of EU financial instruments relevant for the Carpathian macro region and in formulating directions for Ukrainian national and regional authorities. These include prioritizing capacity building for local governments, aligning domestic regional policy with EU cohesion objectives, using existing instruments more strategically in anticipation of future membership, and actively engaging in the design of a Carpathian macro regional strategy so that the specific needs of Ukrainian Carpathian regions are embedded in the next programming cycles.