Public debt service
The process of government debt management is a set of actions related to preparation for the issue and placement of government debt obligations, regulation of the government securities market, servicing and repayment of government debt, provision of loans and guarantees.
Public debt management covers methods of both direct (institutional, technical, actually economic) and indirect regulation (impact on macro- or microeconomic levers of national economy management).
Public debt management in a broad sense is understood as the formation of one of the directions of the state's economic policy related to its activities as a borrower. This process includes: the formation of public debt policy; determination of the main directions and goals of influence on micro- and macroeconomic indicators; establishing the possibility and feasibility of financing from the state debt of national programs and other issues related to the strategic management of public debt; setting the boundaries of debt.
Debt management in the narrow sense is understood as a set of activities related to the issue and placement of government debt, servicing, repayment and refinancing of government debt, as well as regulation of the government securities market.
The process of public debt management, both in a broad and in a narrow sense, requires a systematic approach from the state and determines the multifaceted nature of the existing debt management. In turn, systemic debt management is impossible without a clear classification of debt.
Servicing the public debt is associated with the redistribution of income in the country. To pay off the debt, you can use the assets of the state, privatizing state property. Another approach is associated with increasing budget revenues by expanding the tax base. The burden of service is shifted to the taxpayers. Another source of debt repayment can be loans from the Central Bank. However, in the conditions of the country's main bank, independent of the government, it is very difficult to use emission to reduce debt. Servicing the external debt actually means the legal export of capital, which is reflected in a separate line in the balance of payments, that is, it leads to the redistribution of part of the national income through the fiscal and monetary system in the interests of non-residents.
Financing the budget deficit from domestic sources also does not always contribute to the development of the national economy. An increase in domestic debt means an increase in the share of government borrowing in the financial market. This can lead to competition for resources in the domestic financial market, an increase in interest rates and a decrease in the capitalization of the private securities market. In addition, investments are reduced, since investment projects with a profitability not exceeding the interest paid on government securities together with the risk premium will remain unfulfilled.
The cost of servicing the state debt of the Russian Federation in 2010 is projected at US $ 304.0 billion. Interest payments (servicing state and municipal debt) in January 2010 amounted to 17.1 billion rubles, their share in the total volume of federal budget expenditures amounted to 2.6%.
Public Debt Management Challenges
To solve the emerging problems of the federal budget, it is necessary to develop a strategic program for managing public debt as an integral part of the debt of the Russian Federation. At the same time, one cannot but take into account that in a developing economy at the stage of economic growth, debt management is carried out in accordance with the growth rate of GDP, income of all sectors of the economy, the tax base, and in certain circumstances - a relatively low real rate on debt obligations with long borrowing periods.
The public debt management strategy should be based on matching the dynamics of debt with the rate of economic growth and reducing the cost of servicing it. Compliance with these conditions, as a rule, allows, with an increase in the absolute scale of borrowing, to maintain the ratio of public debt to GDP at approximately the same level, preventing a situation in which debt begins to negatively affect the economy. The main problems considered when solving issues of new borrowing are the effectiveness of borrowing, determining the permissible size and sources of their coverage, assessing the impact of borrowing on socio-economic development.
The conditions of the modern economy determine the need to form a special strategic program for monitoring and managing public debt, including loans from the constituent entities of the Russian Federation and local governments. At the same time, monitoring of the external debt of banks and enterprises should be ensured. The complexity of the problem lies in the fact that public debt is heterogeneous, and its constituent elements require specific regulatory mechanisms using various financial instruments. Many components have a high degree of uncertainty and require special analysis to select the most effective regulation methods.
The strategic program for servicing and repaying the public debt should be coordinated with the methods of managing the state budget as a whole, the size of its deficit and the regulation of the general economic situation in the country.
The debt management program should include:
* balancing tax and non-tax revenues of the budget and issuing activities with the size of the state debt, its dynamics in order to stabilize and possibly reduce the state debt, primarily external;
* measures for restructuring the state debt and canceling it by creditors;
* the possibility of refinancing the state debt;
* reduction in the cost of servicing the public debt, taking into account the inflationary depreciation of the principal amount of the debt and the cost of servicing it;
* sources of foreign exchange for repayment and servicing of external debt;
* reduction in government spending;
* control over the borrowings of the constituent entities of the Russian Federation;
* control over the borrowings of economic entities.
The participation of the Bank of Russia in servicing external debt is mostly passive due to the formation of foreign exchange reserves, the implementation of foreign exchange policy and the policy of the exchange rate of the ruble. Ensuring the stability of the national currency is mainly implemented within the regulated foreign exchange market.
The underdevelopment of the institutional framework of state borrowing, which largely determines the negative trends in this area, manifests itself in the form of a number of circumstances, among which is the existing system of concentration in one department of the functions of state borrowing, including all stages and elements of this institution. The connection in one financial center of financial flows of different mechanisms and instruments, while simultaneously combining executive and control functions, carries the danger of serious violations in this area. Solving the problem of allocating the functions of government borrowing, including all structural elements of the process, in particular, determining the strategy of government borrowing, efficiency and servicing both external and internal debts, into an object of relatively independent management is the main task in the field of increasing the efficiency of the institution of government borrowing and preventing threats to national security.
The state (regional, municipal body) can act not only as a lender, but also as a borrower. There are not always funds to cover the loan obligation. Therefore, you should know what is meant by servicing public debt and how this process is carried out.
General information
There are two types of government debt:
- Current - a loan that needs to be repaid this year, as well as interest payments on all existing loans.
- Capital - the total amount of all loans, external and internal loans, etc.
Debt obligations of the state arise before:
- legal entities and individuals;
- participants in international law;
- subjects of the country;
- foreign partners, etc.
Financial indebtedness can arise for a number of reasons:
- Deficit of funds in the state budget.
- Negative balance, that is, expenses are greater than income.
- Special economic measures aimed at reducing the tax burden without using budget money.
- Increase of state functions in the economy.
- Foreign investment attracted to strengthen the national currency.
- Excessive increase in expenditure indicators due to major political events (election race for the presidency, etc.).
- Martial law or fighting.
The national debt can be formed as before individuals. and other states
Depending on whether the creditor is a resident or non-resident of the Russian Federation, the state debt is divided into external and internal. The last of them, in turn, can be divided into two types:
- Monetized is borrowings that have been issued but are not redeemed. This includes loans to foreign borrowers, state-owned enterprises and federal or regional structures.
- Non-monetized is a debt on financial payments provided for by the current legislation of the Russian Federation (pensions, scholarships, salaries, and other types of social security).
This concept means the fulfillment of all material obligations assumed by the state.
Debt composition
The debtor's penalty arises due to the inept credit policy of the state authorities. Debts include:
- The principal amount of the loan.
- Nominal size of securities (Eurobonds, excise taxes, etc.).
- Warranties issued by a ministry, government or government agency.
The composition does not include interest and other forms of income.
Normative base
All rules and conditions for servicing the public debt are determined in Art. 119 BC RF. This term means a set of transactions aimed at repaying the income of loans. Depending on the level of debt, services are financed from the corresponding budget (federal, regional, municipal).
In accordance with the current legislation of the country, it is indicated that the function of an agent of the Government of the Russian Federation can be performed by a bank or any other credit, financial company. They have the right not only to directly service the debt, but also to buy it back, transfer, refinance, etc.
Public debt servicing is carried out in accordance with the budget code
Such activities are carried out on the basis of an agreement concluded with the Ministry of Finance. At the same time, the Central Bank performs these functions without further reimbursement. Payment for the activities of agents comes from the federal budget of the country. If an agreement, according to which the debt of the authorities will be serviced by another structure, is concluded with local administrative bodies, then payment for the company's services is made from the budget of the municipality or region.
Expenses
Everything related to them is governed by Art. 111 BC RF. The management and distribution of funds is planned for each next year in advance. The total amount calculated according to the formula is approved in accordance with the legal act on the budget.
The maximum ratio of the amount of expenses for servicing debt cannot exceed 15% of the total amount of expenses (excluding subventions).
Management methods
There are several main ways that government officials are guided:
- Refinancing is the replacement of old debt obligations with new ones by issuing new loans.
- Conversion - adjustment of the original loan conditions (maturity, interest rate, etc.).
- Consolidation means that several relatively small loans are consolidated into one large, extended period.
- Unification is the collection of small and medium loans into one large one. At the same time, old bonds are replaced with new ones. Sometimes there is a substitution in a regressive form, that is, several old securities are equated to one new one.
- The deferral means the extension of the maturity period.
- Cancellation is a kind of debt forgiveness. There can be many reasons for this (bankruptcy of the government, change of government, etc.).
- Restructuring. This method has some similarities with refinancing, since it makes it possible to revise the original conditions (the amount of interest and payments, term, etc.).
- Ransom. If the debt is considered hopeless, then it can be put up for sale, and another state or organization has the right to purchase it.
Various methods can be used to resolve issues with public debt.
All of the options described above are valid, but are used in certain circumstances. Depending on the situation, this or that method may be a good solution to the problem.
Outcome
The state, like any other financial or commercial structure, is a participant in monetary relations, therefore it can issue and borrow funds. Due to various circumstances (emergency, mismanagement of the loan, unsuccessful investments, wars, etc.), there is a possibility of forfeit. Therefore, it is necessary to clearly think over and plan the service and management of public debt in order to avoid unpleasant situations that can lead to serious financial difficulties or political disagreements.
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Under government debt management means a set of measures of the state to pay income to creditors and repay loans, change the conditions of already issued loans, determine the conditions and issue new government securities.
Public debt management is carried out by the Government of the Russian Federation within the limits of its powers.
Management objectives public debt is:
- o maintaining the volume of public debt at an economically safe level;
- o maintaining the cost of servicing public debt;
- o ensuring the fulfillment of state obligations in full at a lower cost for the medium and long term.
The payment of income on loans and their repayment are usually made at the expense of budgetary funds. However, in the context of a significant increase in government debt and growing budgetary difficulties, the country may resort to refinancing government debt.
Under refinancing means the repayment of old government debt by issuing new loans.
For example, our country used refinancing to repay the debt on the government's 3% domestic winning loan in 1966. Upon the expiration of this loan, the bonds were exchanged within one year for the bonds of a new loan - an internal winning loan of 1982 without paying the exchange rate difference.
Refinancing was also used to issue government treasury bonds. As the implementation progressed, additional funds were allocated to repay the loans of 1955-1956, which were spread among the population by subscription.
Refinancing is actively used when paying interest and repayments on the external part of the public debt. An indispensable condition for the provision of new loans is the reputation of the debtor country in the circles of the international financial market, its economic and political stability.
Loans are repaid by drawing draws of winnings (when the face value of the bond is paid along with the winnings), as well as drawdowns on winning and interest-bearing loans, or by buying back government securities from creditors. The payment of income on loans is made by drawing winnings, by annual payment of coupons by banks or by transferring the amount of income in a non-cash form to the accounts of enterprises and organizations. A non-cash procedure for receiving income was provided for a state domestic five-percent loan of 1990, distributed among enterprises, as well as banks, insurance and other financial institutions.
The payment of winnings, annual interest, and loan repayments makes up the bulk of public debt management costs. The latter also includes the costs of manufacturing, sending and selling state securities, holding the circulation of winnings, circulation of redemption and some other costs.
The state should take care of the effectiveness of state loans. A superficial idea of the performance of borrowing operations can be obtained by comparing the amounts of annual receipts from the public credit system. A relatively complete picture of the effectiveness of government lending operations is provided by the ratio of the excess of receipts over expenditures on the state credit system to the amount of expenditures, expressed as a percentage.
Credit efficiency (E) is determined by the formula
E = ((P-R) / R) x 100,
where P - receipts from the state credit system; Р - expenses on the system of state credit.
However, the amount of receipts from the state credit system and the excess of receipts over expenditures on credit operations do not provide an exhaustive description of their effectiveness. It is also necessary to take into account the positive impact of state credit on the state of the state budget and the country's monetary circulation, strengthening public confidence in the financial activities of state structures and, as a result, on favorable trends in the economic development of society.
The external public debt is determined coefficient his service. It represents the ratio of all payments on debt to foreign exchange earnings of the country from the export of goods and services, expressed as a percentage. A safe level of public debt servicing is considered to be up to 25%. In our country, the external debt service ratio significantly exceeds the permissible limits.
Measures in the field of public debt management, such as conversion, consolidation, exchange of bonds at a regressive ratio, deferral of repayment and cancellation of loans, are aimed at achieving the effectiveness of public credit.
Under conversion the change in the yield of loans is understood. In order to reduce the cost of managing public debt, the government most often reduces the amount of interest paid on loans. However, an increase in the yield of government securities for creditors is also possible.
Under consolidation means a change in the terms of loans associated with their terms. The state is interested in obtaining loans for long periods. Extending the term of already issued loans can be achieved through the consolidation of public debt.
Unification loans is a combination of several loans into one, when bonds of previously issued loans are exchanged for bonds of a new loan. The unification of government loans is usually carried out in conjunction with consolidation, but can also be done outside of it.
Such a measure provides for a decrease in the number of types of securities circulating at the same time, which simplifies the work and reduces the state's expenses on the state credit system. In exceptional cases, the government may conduct exchange of bonds on a regressive basis, those. when several previously issued bonds are equated to one new bond.
Deferral of loan repayment or all previously issued loans is carried out in conditions when the further active development of operations for issuing new loans does not have financial efficiency for the state. This happens at a time when the government has already issued too many loans and the terms of their issue were not favorable enough for the government. In such cases, most of the proceeds from the sale of bonds of new loans are used to pay interest and redemption on previously issued loans. To break this vicious circle, the government announces a deferral of loan repayments, which differs from consolidation in that the delay not only pushes back the maturity, but also stops the payment of income.
Conversion, consolidation, unification of government loans and exchange of government bonds are usually carried out only in relation to domestic loans. As for the postponement of repayment of obligations, this measure is also possible in relation to external debt. The deferral of repayment of external loans, as a rule, is carried out in agreement with the lenders. At the same time, the postponement of debt repayment may not result in the suspension of interest payments on it.
Under cancellation of public debt is understood as a measure as a result of which the state completely refuses obligations on issued loans (internal, external, or for the entire public debt).
Cancellation of government securities can be carried out for two reasons. First, the cancellation of the public debt is announced in the event of the financial insolvency of the state, i.e. his bankruptcy. Secondly, the cancellation of the debt may be a consequence of the coming to power of new political forces, which, for certain reasons, refuse to recognize the financial obligations of the previous authorities. Note that at present the RF Government has recognized a part of the external pre-revolutionary debt.
The area of public debt management is important, related to the definition of conditions and the issuance of new loans. When determining the conditions for issuing loans, the main of which are the level of return on securities for creditors, the duration of loans, the method of paying income, the state must be guided not only by the interests of achieving maximum financial efficiency of loans, but also to take into account the real situation in the financial market. The success of new loans can only be ensured if the situation in the economy, the state of money circulation, the level of profitability and the terms of existing loans, the benefits provided to lenders and many other factors are correctly taken into account.
When managing public debt, it is also used restructuring - repayment of debt obligations with the consent of creditors, with payment by installments (i.e., acceptance of other debt obligations) in the volumes of debt obligations to be repaid with the establishment of other conditions for servicing debt obligations and maturity dates (revision of payment terms, writing off part of the debt).
In world practice, there are four main schemes for restructuring sovereign debt:
- o exchange of one debt for another ("bonds-bonds" scheme);
- o exchange of debt obligations for shares within the framework of the state privatization program ("bonds-shares" scheme);
- o early redemption of debt obligations at a discount (“redemption” scheme);
- o writing off part of debt obligations.
In order to manage the state debt and reduce it, Russia is developing a program of state external borrowings of the Russian Federation for the next financial year, indicating the purpose, sources and volumes of borrowings, as well as the timing of repayment. As a result of the management procedure, the debt decreases, and in some cases even increases. If the debt or part of it is written off, then on condition that new loans are taken.
A program of state domestic borrowing of the Russian Federation to cover the deficit is also being developed.
All funds received by the budget from borrowings, including funds spent on servicing and repaying public debt, are reflected in the budget as sources of financing the budget deficit.
The public debt management system is the interconnection of budgetary, financial, accounting, organizational and other procedures aimed at effective regulation of public debt and reducing the impact of the debt burden on the country's economy.
The public debt management system is directly related to the budgetary process, since the debt policy and the public debt management system directly affect the formation of budgetary policy. With this in mind, public debt management policies and a debt management system are prerequisites for sound fiscal policy and the smooth functioning of the budget process.
Within the framework of public debt management, two books on public debt accounting:
- o State debt book of the Russian Federation in relation to the state internal debt;
- o State debt book of the Russian Federation in relation to public external debt.
The methodology for accounting for debt obligations differs to a large extent in various departments of the Ministry of Finance of Russia, accounting not only by categories of debt, but also by types of debt obligations, which makes it difficult to determine the exact amount of debt and long-term budget planning in terms of servicing and repaying public debt and attracting borrowings.
Paying interest for a long time, and the gradual repayment of the principal amount of the debt is called debt service.
The excessive interest of the Government of the Russian Federation at the beginning of the market reforms with loans had a negative impact on the budget, and, consequently, on the financing of economic and social sectors.
With a lack of tax and non-tax funds to generate budget revenues, the state uses its capabilities to attract additional financial resources by borrowing funds, accumulating debt, which ultimately leads to an increase in public debt.
RF policy in the field of public debt. In accordance with the principles of debt policy in 2005 and 2006. The Russian Federation carried out early repayment of state external debt obligations. In January 2005, the balance of debt obligations to the IMF was repaid in full ahead of schedule. In June 2006, the Russian Federation fully repaid its debt to the Paris Club of creditors.
Currently, the level of public debt remains at a safe level of less than 9% of GDP (the volume of external debt amounted to 2.8% of GDP by the end of 2010), which ensures the stability of the budget system and contributes to strengthening the international prestige of Russia as a state with a significant supply of financial and debt sustainability, with a reputation for being a conscientious borrower and committed to concrete policy measures to improve the country's investment climate.
State debt policy of Russia for 2008-2010 did not provide for the attraction of financial unrelated loans in the external market.
Principles of the state debt policy of the Russian Federation:
- o replacement of public external debt with domestic borrowings;
- o development of the government securities market;
- o use of government guarantees to accelerate economic growth;
- o use of instruments of debt policy in order to implement additional sterilization of excess money supply and fight inflation.
In the field of domestic borrowing, the debt policy in 2010-2013. will proceed from the development goals of the government securities market. The key tasks will be to increase the liquidity of the market portion of the domestic government debt and maintain the optimal duration and yield on the government securities market.
During this period, it is planned to have a positive balance of borrowings in the domestic market, which does not lead to an increase in interest rates. Borrowings on the market for domestic government debt will mainly be of medium and long term nature.
Restrictions on borrowing in the domestic market with an almost complete rejection of external borrowing, combined with early repayment of a significant part of external debt from the Stabilization Fund, led to the fact that the size of public debt fell to about 7% of GDP, which is significantly lower than that of most developed countries and economies in transition. The debt service burden on the budget has significantly decreased.
Consideration of the state of the state debt of the Russian Federation makes it possible to highlight the following main points:
- o most of the Russian debt (including the debt of the USSR) is made up of short-term borrowings, which is why over the past ten years the question of debt restructuring has arisen so often;
- o there is no debt management system, i.e. debts in Russia are handled by the Ministry of Finance of Russia, Vnesheconombank, and partly by the Bank of Russia. There is no single body that has dealt exclusively with debt issues, although progress has been made on this issue;
- o repayment and servicing of public debt is currently a priority;
- o the government has become aware of the problem of upcoming significant payments on external debt in the coming years, as evidenced by the mechanism for creating the Reserve Fund prescribed in the budget and statements by the country's leadership on early repayment of obligations to creditors;
- o The loans granted to Russia have brought little benefit to it and have led to an increase in the debt burden.
Reducing the debt burden and leaving the country from the "debt trap" is possible only with a significant steady growth in national production and the implementation of socio-economic policies that provide the necessary conditions for the rise of business and investment activity. Average GDP growth rates should not fall below 4% per year. The budget surplus should be used for scheduled and early repayment of debt.
At the end of June 2010, the leaders of the G-20 states came to a common understanding that budget deficits should be reduced at least by half by 2013, and the ratio of public debt to GDP should be stabilized by 2016. Russia has also assumed such obligations.
In 2010, the sources of covering the federal budget deficit in Russia were funds from reserve funds and borrowings. However, as early as next year, borrowings will become the main source of covering the deficit, which, with the remaining deficit, means a significant (more than 1.5 times) increase in debt service costs - from approximately 300 billion rubles. in 2010 to over 500 billion rubles. in 2013
According to the Ministry of Finance of Russia, if the Russian economy grows by 4% annually in the next decade, and the federal budget deficit is maintained at 3%, then by 2020 the public debt will reach 33% of GDP against the current 10%. At the same time, interest expenses of the federal budget will grow to 3-4% of GDP at borrowing rates of 6-8%.
The need to pay off the state debt requires the search for additional resource receipts to the budget, and they can be obtained (if not counting new loans) only through taxes. In addition, the repayment of debt obligations and the payment of interest on them diverts part of the budget revenues from productive use, reduces the possibility of building up the production and intellectual potential of society, for which future generations are already paying. It sometimes took almost a quarter of the budget to service it.
Optimizing the management of public debt and financial assets is the goal of the Ministry of Finance of Russia. This problem remains relevant, despite the fact that in the previous period the volume of Russia's state debt was systematically decreasing. Its achievement presupposes the solution of a number of key tasks, namely:
- o ensuring an acceptable and economically justified volume and structure of the state debt of Russia;
- o reduction of service costs and improvement of public debt management mechanisms;
- o improving the efficiency of management of foreign financial assets of the Russian Federation.
The Ministry of Finance of Russia manages public debt, including maintaining government debt books, developing programs for government internal and external borrowing, programs of government guarantees in the currency of the Russian Federation and in foreign currency, and also carries out a number of other procedures (budgetary, financial, accounting, organizational, etc. .) aimed at ineffective regulation of Russia's public debt and reducing the impact of the debt burden on the country's economy.
An important direction in improving the system of public debt management in the Russian Federation is the transition to modern methods of active management of debt obligations in order to minimize the cost of servicing and associated risks, to conduct an effective public debt policy and improve the debt instruments of the Russian Federation1.
If the authorities pursue a competent economic policy, which they carried out at the beginning of the second millennium, then the problem of our country's external debt in the coming years can be completely resolved.
The reasons for the budget deficit can be very different. These are wars, economic downturns, tax cuts, and sometimes a lack of political will and determination to cut costs and save budget. Inflation, irrational taxation and investment-credit policies have a negative impact on the budget. By itself, the budget deficit is not always a negative phenomenon, moreover, its presence can stimulate economic development, but this largely depends on the way it is financed. It can be covered in several ways: by issuing money, borrowing from the central bank, loans from the private sector, and external borrowing.
Issuing money is considered the easiest way to cover the budget deficit. But excess emission can cause uncontrolled inflation, devalue savings and the national currency.
The state can also tighten tax policy, but this is an unpopular measure that they try to avoid.
Government loans, in comparison with the above two methods, are the preferred source of financing the budget deficit. This is not as detrimental to the economy as emission, because such, for example, domestic loans consist of temporarily free funds of the population and organizations, respectively, the aggregate demand and the amount of money in the economy does not increase. But there is still a negative impact on the economy. Government securities divert some of the free cash; an increase in demand from the state for money leads to an increase in interest rates, and as a result, there is a reduction in investment in the real sector of the economy.
State loans can be classified according to the following criteria: by subjects of loan relations (loans placed by central and regional authorities); on circulation in the market (market, which are freely bought and sold, and non-market, which cannot change their owners); by borrowing currency (internal and external); depending on the term for raising funds (short-term - up to 1 year), medium-term (from 1 year to 5 years), long-term (from 5 years and more); by the method of determining income (with fixed or floating income); by security (mortgages and non-mortgages); by the nature of the income paid (winning, interest, win-win) and other features1.
Internal and external loans.
In the most general terms, external debt is a debt to foreign states, organizations and individuals, internal debt is a debt of the state to its population. In accordance with the Budget Code of the Russian Federation, the volume of the state internal debt of the Russian Federation includes: the nominal amount of debt on government securities of the Russian Federation, obligations for which are expressed in the currency of the Russian Federation; the amount of the principal debt on loans received by the Russian Federation, and the liabilities for which are denominated in the currency of the Russian Federation; the amount of the main debt on budget loans received by the Russian Federation; the amount of liabilities under state guarantees denominated in the currency of the Russian Federation; the volume of other (except for the specified) debt obligations of the Russian Federation, the payment of which in the currency of the Russian Federation is provided for by federal laws prior to the entry into force of this Code2.
The consequences of public debt for the economy.
Researchers of economic theory distinguish two points of view on the consequences of public debt for the economy. The first is that public debt has an extremely negative effect on the country's economy. It is associated, firstly, with the so-called burden of debt - the population is forced to pay the state taxes necessary to service the debt. Secondly, by borrowing money, the state squeezes out private borrowers from the credit market. Proponents of the opposite idea believe that neither the burden of debt nor the crowding out of private borrowers is happening.
The first direction developed in the work of classical economists. The classical model of the economy assumes that the main engine is not demand, but supply, and the economy self-adjusts. Consequently, there is no need for the state function of stabilization, which means that there is no need for loans either. Adam Smith shared a negative attitude towards public debt. Putting individual entrepreneurial interests above the interests of the state, he emphasized that the state, in contrast to a private borrower, manages capital more wastefully and less efficiently. When the state borrows, the resource it withdraws from the economy is lost, both in the case of internal and external debt. Therefore, Adam Smith puts forward the requirement of a balanced budget, that is, a budget without a deficit.
One of the most thorough studies of this concept was done by Pierre Paul Leroy-Beaulieu. He built the following model of domestic debt: the consequence of loans is taxation of citizens, which is then distributed among the rentiers in the form of interest. At first glance, the welfare of the nation does not change - some citizens, called rentiers, receive interest from other citizens, called taxpayers.
Let's say the loan is canceled. Taxpayers will not pay tax, and rentiers invest their capital differently and will receive about the same interest. Then each party is left with an amount that, in the event of a loan, would belong to only one party. Consequently, the lack of loans makes the nation richer. However, according to Leroy-Beaulieu, there is a case where a loan can be beneficial. This occurs when it is used for well-planned and economically executed public works. Then capital is not destroyed, but is transformed into a public good: the construction of a bridge, a transport network, and so on.
The second view of public debt is often associated with the so-called Ricardo equivalence. David Ricardo did not see public debt as a positive development, but he does believe that debt does not tax future generations. Ricardo assumed that future taxes associated with current borrowing are capitalized by rational citizens the moment debt arises. That is, as a result of the loan, taxes do not increase, they are distributed over time.
Further, the Keynesian school raised its objections to the classical view of public debt. Keynes' followers were at odds with the classics on three points.
First, they did not believe that the emergence of debt meant the emergence of a burden of debt for future generations (at least in the case of domestic debt). They attributed this to the fact that, even taking into account the fact that the descendants will have to pay off the debt, they will also benefit from this debt, since the state will have to pay them interest and the repayment amount.
Second, public debt is not the same as private debt. When a private borrower is employed, he has to take great care in managing his finances so as not to bring himself to bankruptcy.
The probability of the state's bankruptcy is close to zero, no matter how large its internal debt is, since creditors live in the same country with taxpayers.
Third, there is a big difference between domestic and foreign debt. In the case of external debt, the views of the Keynesians are close to those of the classics. But domestic debt is not so bad because of the two above objections. Based on this, the followers of Keynes propose to replace the balanced budget rule with a rule according to which budget expenditures are equal to the sum of taxes and domestic debt.
Modern economic theory is of the view that the effects of debt must be assessed over the time horizon.
In the short term, the economy is Keynesian. The deficit provokes an increase in aggregate demand, which entails an increase in national income.
In the long term, the economy is classical. The deficit slows down the growth of national income and discourages private investment.
Public debt management and servicing.
The public debt management system is a set of budgetary, financial, accounting, organizational and other measures aimed at efficiently regulating public debt and reducing the impact of the debt burden on the country's economy, in particular, paying off income to creditors and repaying loans, changing the terms of already issued loans, determining conditions and the issue of new government securities.
There are the following measures in the field of public debt management: conversion, consolidation, unification, exchange of bonds at a regressive ratio, deferral of repayment and cancellation of loans, refinancing and debt restructuring.
Conversion- this is a decrease or increase in the amount of interest paid on loans.
Consolidation- changes in the terms of loans associated with their terms. As a rule, the state is interested in extending the loan term. Consolidation is usually accompanied by the unification of securities.
Unification- this is the combination of several loans into one, when bonds of previously issued loans are exchanged for bonds of a new loan. This measure is taken to reduce the number of types of circulating securities to reduce the cost of their servicing. In some cases, bonds are exchanged on a regressive basis.
A regressive bond exchange is a situation where several previously issued bonds are equated to one new bond.
Cancellation of public debt- this is the refusal of the state from obligations on issued loans (internal, external or for the entire public debt). Cancellation can occur in case of bankruptcy of the state, or refusal of the new political power to recognize the debts of the previous government.
Under refinancing means the repayment of old government debt by issuing new loans. Therefore, the area of public debt management is of particular importance, associated with the definition of conditions and the issuance of new loans. Intergovernmental loans are usually non-bond loans. Their conditions are stipulated in special agreements. But intergovernmental loans are possible only if the country has a good reputation in the financial market.
Restructuring- repayment of debt obligations with the establishment of other conditions for servicing debt obligations and maturity dates (revision of the terms of payments, writing off part of the debt). Debt restructuring is carried out with the consent of creditors.
The goals of public debt management include: maintaining the volume of public debt at an economically safe level; maintaining the cost of servicing public debt; ensuring the fulfillment of state obligations in full at a lower cost for the medium and long term.
The following table summarizes the objectives of public debt management in different countries.
| Australia | "The main goal ... is to raise debt, manage and service debt with the lowest long-term cost and acceptable vulnerability to risk." |
| Denmark | “The overall goal of government debt policy is to reduce the cost of borrowing as much as possible over the long term. This goal is surrounded by other considerations: - to keep the risk at an acceptable level; - to create in Denmark and maintain a well-functioning, efficient financial market; - to make it easier for the government to enter the financial market in the long term ”. |
| Ireland | “The goal of debt management ... is to refinance repayable debt and finance the government's annual borrowing needs so as to provide short- and long-term liquidity, contain the growth and volatility of fiscal debt service costs, limit the government's vulnerability to risk, and exceed the benchmark (shadow) briefcase". |
| New Zealand | "Maximize long-term economic return on government financial assets and debt in the context of fiscal strategy and government risk aversion." |
| Portugal | “To attract borrowed funds and carry out other financial transactions on behalf of the Republic of Portugal so as to: - Satisfy the republic's need for borrowed funds on a stable basis; - to minimize government spending on debt servicing in the long term, taking into account the risk strategies developed by the government ”. |
| Sweden | “The goal of central government debt management is to minimize the cost of borrowing in the long term, with due regard for the risks associated with debt management. However, management must always comply with the requirements imposed by monetary policy and the instructions of the cabinet of ministers. " |
| United Kingdom | "Maintain the annual volume set by ministers of the Treasury for the sale and purchase of government bonds, with a focus on minimizing long-term costs and taking into account risk." |
| Source: Currie, Elizabeth, Jean-Jacques Dethier, and Eriko Togo, “Institutional Arrangements for Public Debt Management”, World Bank Policy Research Working Paper 3021, April 2003, p. 30. (Alekhin B.I. State debt. A handbook for students of the Academy of Budget and Treasury. M., 2007) | |
In order to determine how effective credit management is, it is necessary to compare the amount of the excess of receipts over expenditures on the public credit system to the amount of expenditures. On the basis of the external public debt, it is possible to determine the ratio of its servicing. This is the ratio of all payments on debt to the country's foreign exchange earnings from the export of goods and services, expressed as a percentage. A safe level of public debt service is considered to be up to 25%.
International experience of government debt policy.
In order to determine the current trends in debt policy, it is necessary to see the level of distribution of public debt across the countries of the world. On the map with the IMF data for October 2014, we see that the percentage of government debt in relation to GDP is distributed extremely unevenly. Debtor countries can be conditionally divided into two groups: debtor countries with a high standard of living and developed economies and debtor countries with undeveloped economies.
Let's start with the first group.
At the beginning of 2014, the United States had the largest national debt, then (developed) countries were distributed in the following order:
USA - 17.61 trillion. dollars
Japan - 9.87 trillion. dollars
China - 3.89 trillion. dollars
Germany - 2.60 trillion. dollars
Italy - 2.33 trillion. dollars
France - 2.11 trillion. dollars
UK - $ 2.06 trillion dollars
Brazil - $ 1.32 trillion dollars
Spain - $ 1.23 trillion dollars
Canada - $ 1.2 trillion dollars
At the same time, if we estimate public debt to GDP, the list will be somewhat different:
Japan - 242.3%
Greece - 174%
Italy - 133.1%
Portugal - 125.3%
Ireland - 121.0%
USA - 107.3%
Singapore - 106.2%
Belgium - 101.2%
Spain - 99.1%
UK - 95.6%
The leading positions in both the first and second lists are occupied by Japan. It should be noted that Japan's public debt is mostly domestic. Its growth began after the 1973 oil crisis. In order to overcome the crisis, the Japanese government carried out the privatization of state corporations, but in the early 90s the economy entered a period of stagnation. Reforms to overcome the problems required budgetary infusions, and the deficit grew. After the Fukushima accident on March 11, 2011, nuclear power plants in Japan were closed, it was necessary to reorient energy production to other resources, primarily imported ones. A large number of people of retirement age and traditional social policy imply developed social programs, which also requires money. All this leads to an increase in budget expenditures. The main priority of the economic policy of the new Prime Minister Shinzo Abe was the expansion of demand in the domestic market, fiscal reforms (in particular, tax increases). However, public debt continued to rise, growing by 1.4% in April-June 2014 and reaching a new record high of 1 quadrillion 39 trillion yen ($ 10.2 trillion). In June 2014, the Bank for International Settlements published a report that estimated that a 2 percentage point increase in the yield on government bonds with 10-year maturities would result in debt servicing costs exceeding tax revenue.
Half of the lines in both lists are occupied by the EU countries, in which a large-scale increase in debt and budget deficits led to a debt crisis.
There are three levels of causes of the European debt crisis: firstly, the impact of the global financial and economic crisis, secondly, internal European integration contradictions, and thirdly, the aggravation of the situation in the most vulnerable countries with a large number of internal economic problems.
The global financial and economic crisis was triggered by excess liquidity that arose as a result of the US Federal Reserve's “cheap money” policy, as well as the accumulation of savings in fast-growing Asian countries. Subsequently, the interest rate decreased, loans began to fall in price, which stimulated the growth of the debt market.
In the EU, the peculiarities of the union itself played a role. From more developed countries, primarily from Germany, the flow of capital was directed to the "peripheral" countries - Spain, Greece, Ireland, Portugal. The influx of money triggered a rapid rise in wages, an expansion of domestic demand and a rise in prices. At the same time, the growth of wages outpaced the growth of labor productivity, the share of exports remained small, while imports, on the contrary, increased. The result was an increase in external debt. The global crisis put an end to the inflow of external financing. The price of loans began to rise. By that time, peripheral countries had already accumulated deficits. The sovereign debt crisis began with the crisis of the Greek government bond market in 2010. The dynamics of its development can be traced in the following graph:
Why did the situation get out of control? The answer lies in the peculiarities of the structure of the European Union. The documentary basis for the economic and monetary union until 2010 was the following documents: Maastricht Treaty, Treaty on the Functioning of the European Union, Lisbon Treaty on Growth and Employment(in 2010 replaced by the strategic program "Europe 2020") and Stability and Growth Pact.
V Maastricht Treaty indicated the criteria that allowed checking the readiness of the country for membership in the union. We are talking about a certain level of inflation - no more than 1.5 percentage points higher than the indicators of the three EU countries with the lowest rates, the size of the budget deficit - a maximum of 3% of the country's GDP, the level of public debt - no more than 60% of GDP.
The modification of documents that followed in 2005 significantly eased the budgetary policy, which was used by national governments, led to an increase in public debt and the level of budget deficits in a number of countries and ended in a crisis.
In order to overcome the crisis, it was necessary to globally revise the internal European policy. In particular, emphasis was placed on thorough macroeconomic monitoring of the countries of the European Union. Today, in the event of deviations from the approved criteria, the European Commission issues recommendations for corrective actions that are associated with certain savings measures. If, after five months, the results are unsatisfactory, sanctions are imposed on the country (which was not in the previous legal framework). In the event of an excessive deficit, the country makes an interest deposit of 0.2–0.5% of GDP. If measures are not taken, the country stops receiving interest. If further EU recommendations are ignored, the deposit turns into a fine. It can be assumed that if such rules had existed before 2010, Europe would either have avoided the crisis, or it would have been much milder.
However, skeptics point to significant shortcomings of such policies, which include the partial loss of sovereignty of the participating countries, a slowdown in economic growth associated with austerity and fines, as well as popular protests that also do not contribute to stability and prosperity.
The second distinguished group is the debtor countries with undeveloped economies. In contrast to highly developed countries, where the main part of the debt is made up of domestic borrowings, in the second case it is mainly external debts: other states, foreign banks, and so on act as creditors. Among the largest debtors are the countries of Africa and Latin America. The debts of most African countries were among the least well-off. In particular, many of them owed the USSR for the supply of weapons. In July 2008, $ 16 billion of African countries' debts were written off by Russia.
As for Latin America, after a series of crises in the 1980s and 1990s, the external debt of the largest countries in the region has grown and continues to grow.
US government debt.
The United States has the largest public debt in the world. Today, the US national debt is already more than 18 trillion. dollars. Why has the United States accumulated such a gigantic debt, and why is it causing worldwide concern? To understand this, it is necessary to understand the history of its formation and its structure.
It can be immediately noted that debts are divided into two groups: Federal Government Accounts and Public. Federal Government Accounts are "non-market debts" held by various off-budget social funds and budgetary organizations. These debts are not traded in the market, they are caused by domestic borrowing in the public sector. Public Debt - Market Debt. Their holders are buyers of US Treasury debt securities in the financial market, primarily treasury securities and treasury bills.
Market debts, in turn, are subdivided into Fed debts and other debts. The share of Treasury debt is growing rapidly. In 2008, in the total volume of government debt, debt issued in treasury securities accounted for 65.2%. And in mid-2013, the share of Treasuries in government debt rose to 75% 8.
Holders of US Treasury securities can be both residents and non-residents. Residents are holders of the financial and non-financial sectors. The Fed belongs to the financial sector. Other financial organizations include investment funds, non-state pension and social funds, deposit-credit organizations (banks), insurance companies. Over the past six years, the FRS share has grown the most: from 2008 (7.8%) to mid-2013 it increased to 16.6%. This growth was facilitated by the programs of "quantitative easing" aimed at buying up "junk" bonds in the US financial market to replace the latter with Treasury bonds. These measures and a number of others were aimed at supporting the US banking system during the 2007-2009 crisis. The Obama administration has continued to pursue a policy of support for distressed financial institutions and troubled mortgage borrowers. The strongest manifestation of this policy was the adoption of a new law on state support - Recovery and Reinvestment Act February 17, 2009 (American Recovery and Reinvestment Act of 2009). According to this law, 787 billion dollars were allocated over two years for programs to support the American economy, overcome the crisis and restore economic growth. In general, in order to overcome the crisis, the state invested about 5 trillion in the economy. USD 9.
As for the US debts from non-residents, these are mainly securities held on the balance sheets of central banks and finance ministries of other countries. These are the so-called official holders of the US government's market debt. Private investors are much less willing to invest in US Treasuries because of their low yield. The main holders of US Treasuries outside America are China and Japan. Many Western European countries also hold US Treasuries. Such a large scale of investment by European countries in US Treasury bonds at first glance seems strange in the face of the European debt crisis. Many experts see this as a manifestation of Europe's dependence on the United States. However, let's not forget that the main advantage of US Treasuries is reliability. In the entire history, there has been no delay or refusal to pay interest on them. For investors, it is an almost risk-free instrument of long-term reliable savings. In 2008, the USA needed a very large volume of issue - not for 200-400 billion dollars, but for 1400 billion dollars (this was exactly the amount that was issued in 2009). But at the same time, the global turmoil made them a particularly attractive asset because of their reliability. This may explain the purchases of US government securities by European countries during the crisis.
So, the US national debt is growing, which means that the cost of servicing it increases, and then the budget deficit. In order to avoid a technical default, the US government is forced to raise the "ceiling" of the national debt for new and new borrowings. This inspires serious concern and also serves as a map in the political game between the Republican and Democratic parties. The first act as supporters of economy and the establishment of a rigid "ceiling" of the national debt, which will be revised next time on March 16, 2015.
State debt of the Russian Federation.
As of December 1, 2014, the internal debt of the Russian Federation was 4,427,138.353 million rubles, external debt was 5,397.2 million US dollars.
Russia's external debt consists of: loans from the Paris Club of creditors; USSR loans under bilateral agreements; loans issued to Russia since 1992 under bilateral agreements; loans from international financial organizations; market loans (Eurobonds).
The amount of debts inherited from the USSR was about $ 90 billion. These were the shares of all the union republics, which Russia took upon itself in exchange for the republics' refusal from the share of the external assets of the USSR due to them. The largest amount of debt was owed to the Paris and London Club of creditors. In the Paris Club, almost all of the USSR's debt was formed in the 1980s as a result of falling oil prices. The restructuring of this debt was facilitated by Russia's accession to the Paris Club in 1997: a grace period was determined until 2020, during which the Ministry of Finance of the Russian Federation had to pay only part of the interest and only after its end - the principal amount of the debt. But in August 2006, thanks to high oil prices, the debt was paid in full ahead of schedule.
Until 2010, Russia also paid the debts of the USSR to the London Club, which includes private banks and exporting companies, which, after the collapse of the USSR, found themselves in the position of a creditor in relation to Russian importers. In 2010, this debt was paid in full.
Since June 1, 1992 Russia has been a member of the International Monetary Fund. Cooperation with the Fund was carried out on the basis of regular targeted programs. Lending continued until August 17, 1998, when the Russian authorities were forced to make decisions on the actual declaration of a default on the domestic government debt (as regards GKOs and OFZs with maturities up to December 31, 1999), establishing a 90-day moratorium on payments on foreign financial obligations of commercial banks and the implementation of measures in the currency area, which led to a fourfold devaluation of the ruble against the dollar and other foreign currencies. The loan package of aid to Russia was temporarily frozen. Another tranche from the IMF was received in July 1999, and since 2000 Russia has never applied for a loan from the IMF.
From 2004 to 2006, there was a steady decline in public debt, however, after the 2008 crisis, it began to grow again.
Today we are again going through a massive decline in energy prices. But, firstly, now Russia has a relatively small public debt, and secondly, there are funds accumulated over the years of surplus - funds from the Federal Reserve and the National Welfare Fund. In the document "Main Directions of the State Debt Policy of the Russian Federation for 2013–2015", possible negative consequences of the political situation, economic shocks and other possible negative factors were assumed. Therefore, the debt policy was aimed at:
- ensuring the balance of the federal budget while maintaining a high degree of debt stability;
- development of the government securities market;
- ensuring optimal access to sources of borrowed capital10.
It was planned to increase the number of types of debt instruments and gradually build up internal debt in order to avoid a serious burden on its servicing. However, the reality has adjusted the forecasts. Oil fell far below projected values, the state of the economy and the influence of political factors lead to a budget deficit. Accordingly, the domestic public debt will be increased.
Today the state issues the following types of securities.
1) Bonds of the federal loan, which provide for interest payments on coupons. OFZs are issued by the RF Ministry of Finance and are divided into OFZ AD - with debt amortization, providing for periodic repayment of the principal amount of the debt, and OFZ PD - with constant income, when the coupon is paid once a year and is fixed for the entire circulation period.
2) Government savings bonds. The latter are available with a fixed interest rate and with a constant interest rate. GSOs are not traded in the secondary market, and are not intended for foreign investors. They are issued for insurance organizations, pension and investment funds, management companies, as well as off-budget funds.
3) OVOZ - bonds of domestic loans of the Russian Federation. The OVOs issued to date are due in 2018.
In the draft federal budget for 2015–2017, the Ministry of Finance predicts the level of the domestic public debt of the Russian Federation at the end of 2015 at 7.4 trillion rubles, the external public debt - 64 billion rubles. The domestic public debt of the Russian Federation at the end of 2016 is expected at 7.9 trillion rubles, at the end of 2017 - 8.7 trillion rubles. The upper limit of the external public debt of the Russian Federation as of January 1, 2017 was set at 71.5 billion US dollars (55 billion euros); as of January 1, 2018 - 77 billion US dollars (59.2 billion euros).
Regarding a possible default in Russia in 2015, there are two opposite points of view. Optimists, primarily official sources, say that there is no question of default due to the accumulated foreign exchange reserves. Pessimists, including Saxo Bank, predict a default in 2015, which will be caused by economic instability. It is assumed that foreign exchange reserves will be quickly squandered to compensate for losses from the sanctions.
Conclusion.
1) Public debt is a tool that has become the most widespread in recent years, although theorists assess it ambiguously. The classical school gives negative assessments to this tool, Keynesianism fully admits its use if this debt is internal. The attitude to external debt is unambiguously negative, since it inhibits economic development.
2) Public debt management is a fairly costly item in the state budget. It consists in issuing government securities, servicing existing debts and restructuring them whenever possible. But even the most skillful debt management cannot eliminate the burden of debt repayment, which falls on the shoulders of either current or future generations. The inability to pay debts causes irreparable damage to the country's economy, as it undermines the confidence of investors and the population.
3) The growth of public debt can be justified in the case of the implementation of large public projects, which will subsequently bring great public benefit. Or in critical conditions, for example, during a war.
4) States can be conditionally divided into those who are involved in critical situations, and those who attract additional resources to improve the living standards of the population or for some political purposes. The former include the poorest countries in Africa and Latin America, the latter - the developed and emerging economies.
5) Even advanced economies are experiencing serious economic and political problems in the case of excessively inflated public debt, and are taking the most intense measures aimed at reducing it. In the coursework, a similar situation is considered on the example of Japan and the European Union. In both cases, governments are ready to take unpopular measures - such as austerity policies, cuts in social benefits, and even partial loss of sovereignty - to reduce the national debt. And this is not surprising. After all, this is not only a growing budget deficit, but, in the case of external debt, it is also an instrument of political pressure.
6) The main interest is the situation with the US government debt. Today it is the largest public debt in the world, which is constantly growing. Some authors, pointing out that the United States attracts resources from all over the world to its economy, suspect some kind of evil will of a certain circle of people, developing a conspiracy theory. One of the main questions is what can happen if the US government refuses to raise the public debt ceiling and declares a technical default. Opinions differ here - optimists believe that with a high GDP and certain austerity measures, the United States will be able to cope with its borrowings. Pessimists speculate that the case could end in World War III, recalling that such a situation with public debt looks like a repetition of the economic problems that the United States faced before World War II.
But no matter how the situation develops, in any case, its influence will spread far beyond the boundaries of the American economy, and no one doubts this.
7) Russian public debt and the dynamics of its growth are strictly interconnected with oil and energy prices. The relationship is the opposite - when energy prices rise, the government pays off its debts. When energy prices fall, government debt rises. During certain periods of its existence, both the USSR and the Russian Federation created a fairly large external debt. Today the situation in the economy is the most unfavorable, and the government is following the path of developing the state internal debt. This seems to be the only possible way out of the situation, since certain funds have been accumulated in the economy during the period of sustainable development, which the state can borrow and use to solve pressing problems. If these funds are used to modernize industry and agriculture, introduce innovations, then our country has a chance to get an additional impetus for development. Some factors (the budget for the defense complex, which drags the entire economy with it; reorganization of the banking system, etc.) allow us to hope for this optimistic option.
Anastasia Blucher
Literature:
Nikolaeva T.P. The budgetary system of the Russian Federation: educational and practical guide... Ed. EAOI Center, 2010
Alekhin B.I. State debt. A handbook for students of the Academy of Budget and Treasury. M., 2007
Seregina S.F., Larionova M.L. European Debt Crisis and New Directions for Reforming EU Economic Policy Mechanisms... Russian economic journal. 2012, No. 6
Katasonov V.Yu. Who owes the US? http://www.fondsk.ru
The main directions of the state debt policy of the Russian Federation for 2013–2015. www.minfin.ru
Budget Code of the Russian Federation. Section 98
13. Public debt: essence, types, forms of management.
Introduction
Chapter 2. The state debt of the Russian Federation and its impact on the functioning of the economy
Introduction
Most of the countries of the world, carrying out economic transformations, turn to external and domestic sources of financing. Rational use of loans contributes to the acceleration of economic development, the solution of socio-economic problems. However, the absence of a coherent state policy on attracting and using both external and internal loans leads to the formation of public debt, which is becoming a serious obstacle to economic transformations.
The problem of government loans is one of the most acute problems in the Russian economy.
The size of public debt is important, one of the main issues is to determine the level of influence of public debt on the functioning of the country's economy.
Public debt can have a positive and negative impact on the socio-economic processes of the country. So, under certain conditions, debt has a positive effect on economic growth. At the same time, it is necessary to precisely define these conditions, which requires an adequate policy of public debt management.
The unfavorable dynamics of public debt, caused by the huge costs of servicing it, forced many economists to engage in in-depth research and search for solutions to the problem that has arisen in the financial system of our country. Indeed, the outstanding public debt is one of the obstacles to the normal economic development of the country.
The purpose of the course work is to study the impact of public debt on the economy of the Russian Federation.
The purpose of the work defines the following tasks:
To reveal the essence of public debt and the reasons for its occurrence.
Consider the forms and types of public debt.
Consider public debt management.
Analyze the current state of the external and internal public debt of the Russian Federation and its impact on the economy.
Chapter 1. The economic content of public debt
1 The essence of public debt and the reasons for its occurrence
Public debt is understood as the result of the state's financial borrowings carried out to cover the budget deficit. Public debt is equal to the sum of the deficits of previous years, taking into account the deduction of budget surpluses.
The state debt of the Russian Federation includes debt obligations of the Russian Federation to individuals and legal entities, constituent entities of the Russian Federation, foreign states, international financial organizations, other subjects of international law, foreign individuals and legal entities that arose as a result of government borrowings of the Russian Federation, as well as debt obligations under state guarantees provided by the Russian Federation, and debt obligations arising as a result of the adoption of legislative acts of the Russian Federation on the attribution of debt obligations of third parties to public debt.
According to the current legislation, state and national debt should be distinguished. The latter concept is broader and includes the debt not only of the Government of the Russian Federation, but also of the governing bodies of the republics that are part of the Russian Federation, local authorities.
The state debt of the Russian Federation is fully secured by all federal property that makes up the state treasury. Despite the fact that the state's credit relations are provided by its treasury, debt obligations are repaid and serviced at the expense of federal budget revenues. The Budget Code of the Russian Federation prescribes the federal government bodies to use all the powers to form federal budget revenues in order to pay off debt obligations and service the state debt of the Russian Federation.
Public debt is a direct consequence of the government's credit policy. Its composition depends on the forms of state credit, which are used to attract temporarily free funds at the disposal of public authorities. According to Article 98 of the Budget Code of the Russian Federation, the volume of the state debt of the Russian Federation includes only the principal amount of debt on loans, the nominal amount of debt on government securities and the volume of obligations under guarantees issued by Russia. The payment of interest and non-interest income on government borrowings does not form the composition of the state debt, since, according to the Budget Code of the Russian Federation, they are an independent form of federal budget expenditures.
Public debt arises when the state's expenditures begin to exceed its revenues, that is, a budget deficit is formed which is covered by state borrowings.
The reasons for the emergence of public debt are:
extraordinary circumstances (wars, terrorist attacks, major natural disasters) when reserve funds are insufficient and the government has to resort to additional borrowing;
economic downturns, which are caused by the automatically achieved instability of the economy. That is, in the context of an economic downturn, the national income decreases, which leads to a decrease in tax revenues and a budget deficit arises, which is repaid by government loans;
crisis phenomena in the economy - the inefficiency of the economic infrastructure, financial and credit relations, monetary, banking and fiscal policies. That is, in this case, there is a need for structural restructuring of the economy. In such cases, urgent economic measures are required to stabilize the economy, which require large amounts of money;
large state investments in the development of the economy. In this case, the budget deficit reflects active government regulation of the economy, the desire to ensure progressive shifts in its structure;
social and economic policy of the state. The main reason for large budget deficits is a decrease in tax revenues without adjusting government spending, as well as an unsatisfactory organization of tax collection and payments (high costs of organizing tax collection, tax evasion);
social change. For example, an increase in the proportion of elderly people in the population structure entails an increase in government spending on social security and health care.
2 Forms and types of public debt
In accordance with the legislation of the Russian Federation, the composition
public debt includes:
credit agreements and contracts concluded on behalf of the Russian Federation, as a borrower, with credit institutions, foreign states and international financial organizations;
government loans carried out by issuing securities on behalf of the Russian Federation;
contracts and agreements on the receipt by the Russian Federation of budget loans and budget loans from the budgets of other levels of the budget system of the Russian Federation;
agreements on the provision of state guarantees by the Russian Federation;
agreements and contracts concluded on behalf of the Russian Federation on the restructuring of the debt obligations of the Russian Federation of previous years.
Types of public debt.
Depending on the term and volume of obligations, the public debt is divided into:
public capital debt is the total amount of issued and outstanding debt obligations of the state, including the accrued interest that must be paid on these obligations.
the current public debt is the state's expenditures on the payment of income to creditors and the repayment of obligations that have come due.
Depending on the borrowing market and the currency of the arising liabilities, public debt is subdivided into:
external public debt is loans attracted from individuals and legal entities, foreign states, international financial organizations in foreign currency, for which debt obligations of the Russian Federation arise as a borrower or guarantor of repayment of loans by other borrowers, denominated in foreign currency.
the internal debt of the Russian Federation is loans attracted from individuals and legal entities, foreign states, international financial organizations in the currency of the Russian Federation, for which debt obligations of the Russian Federation arise as a borrower or guarantor of repayment of loans by other borrowers, denominated in the currency of the Russian Federation.
The volume of external public debt includes:
the nominal amount of debt on government securities of the Russian Federation, obligations for which are denominated in foreign currency;
the amount of the principal debt on loans received by the Russian Federation and the obligations for which are denominated in foreign currency, including for targeted foreign borrowings attracted under state guarantees of the Russian Federation;
the volume of obligations under state guarantees of the Russian Federation, denominated in foreign currency.
The volume of domestic public debt includes:
the nominal amount of debt on government securities of the Russian Federation, the obligations for which are denominated in the currency of the Russian Federation;
the amount of the principal debt on loans received by the Russian Federation and the obligations for which are denominated in the currency of the Russian Federation;
the amount of the main debt on budget loans received by the Russian Federation;
the amount of liabilities under state guarantees denominated in the currency of the Russian Federation;
the volume of other (except for the specified) debt obligations of the Russian Federation, the payment of which in the currency of the Russian Federation is provided for by federal laws before the entry into force of this Code.
In some cases, the subject composition can serve as an additional criterion for dividing public debt into external and internal. The provision of credit funds to the state by residents indicates the formation of internal debt, borrowing funds from non-residents leads to the formation of external debt.
In terms of timing, government obligations can be:
short-term (up to 1 year);
medium-term (from 1 to 5 years);
long-term (from 5 to 30 years).
Debt obligations are repaid within the terms that are determined by the specific terms of the loan and cannot exceed 30 years. Changes in the conditions of the state loan issued into circulation, including the timing of payment and the amount of interest payments, the circulation period, is not allowed.
national debt national economy
1.3 Public debt management
The public debt management process is of particular importance for the implementation of an effective financial policy in the field of public borrowing. Public debt management is understood as - a set of financial measures of the state, on the use of debt relations, aimed at repaying debt obligations and creating favorable socio-economic conditions for the development of the country; it is also one of the directions of the country's financial and budgetary policy, associated with the activities of the state in external and internal financial markets as a borrower and guarantor. The management envisages raising financial resources by placing securities or other sources, paying off and servicing debt obligations.
The ideal way to service and pay off public debt is to return it and interest on time on time. However, the intentions of the state do not always coincide with the real possibilities. Some unforeseen circumstances appear due to economic, social or political difficulties. There is a need to defer the payment of interest or the payment of the principal amount of the debt, to change the terms of the loan, and sometimes to completely refuse payments. A clear sign of a debt crisis is a serious disruption to the payment schedule. The state is forced to resort to various methods of debt management.
Measures that contribute to the repayment of public debt include:
repayment of external and internal loans;
provision of guarantees;
changes in the terms of issued loans;
determination of the conditions for the issue and placement of new government debt obligations, etc.
The implementation of these measures depends on the adoption of informed decisions in the process of public debt management, which is based on an analysis of the volume and structure of debt, an objective assessment of its current state. In this case, absolute and relative indicators are used.
Absolute indicators reflect the volume of state internal and external debt in monetary terms, the amount of expenses associated with its repayment and servicing.
The main relative indicators that significantly influence the adoption of administrative decisions and the choice of public debt management methods include:
the percentage of debt to GDP;
the share of expenditures on repayment and servicing of the state debt in the total amount of budget expenditures.
Public debt management is an ongoing process that includes 3 stages:
at the first stage, the maximum amount of government borrowing and guarantees for the next budget year is determined, tools for attracting resources and increasing the efficiency of their use are selected.
at the second stage, resources are attracted in external or internal financial markets by issuing and placing government securities, obtaining a loan or providing government guarantees, and then these funds are used to finance current budget expenditures or investment projects.
the third stage is to search for sources of financial resources to pay off and service the public debt, reduce overall costs, and timely fulfill debt obligations.
Public debt management methods can be divided into administrative and financial.
Administrative methods are based on the quick and accurate implementation of individual orders of state authorities and administration; they do not provide for an assessment of the economic efficiency and results of actions for public debt management.
Financial methods consist in the choice of methods and forms of ensuring the repayment of public debt using the analysis of financial indicators and are aimed at maximizing the effect of borrowed loans with minimal costs associated with their repayment and maintenance.
In the context of the debt crisis, when the state is experiencing difficulties in fulfilling its earlier obligations to repay and service public debt, the following instruments are used:
refinancing - issuing new loans to cover previously issued debt obligations. There are three ways to refinance public debt:
) replacement of liabilities with expired maturities for new ones, equivalent in amount to those being repaid;
) early replacement of some obligations for others with longer maturities;
) placement (sale) of new bonds and, at the expense of the proceeds, the redemption of bonds with expired maturities.
conversion of loans - the use of various mechanisms to ensure the replacement of public debt with other types of obligations that are less burdensome for the country's economy. The most common types of conversion are considered to be the exchange of debt for shares, the exchange of debt for goods, redemption of debt by the borrower on special terms, conversion of debt into debt obligations of third countries, and others;
Consolidation of loans - change of the terms of validity of previously issued loans;
cancellation - waiver of all obligations on previously issued loans. But the use of this method leads to irreparable damage to the reputation of the state as a borrower;
debt restructuring - repayment of debt obligations with the simultaneous implementation of borrowings (taking on other debt obligations).
Thus, public debt management directly affects economic growth, inflation, loan interest, employment, investment in the country's economy as a whole and in the real sector of the economy.
Chapter 2 Debt of the Russian Federation
1 The current state of the external debt of the Russian Federation
In recent years, thanks to the favorable conjuncture of the world commodity markets, as well as the competent policy of the government in the monetary and fiscal spheres, the debt burden of the Russian Federation has significantly decreased. If earlier debt payments bound the entire economy of the country and were an unbearable burden for it, now, thanks to a flexible fiscal policy, they are not so burdensome; the government can afford to make early debt payments and spending on other sectors of the economy.
In absolute terms, the external public debt of the Russian Federation is one of the lowest in Europe. And in relative terms, it is one of the lowest in the world, accounting for only 2.5% of GDP. But such a favorable situation was not always observed. So, after the collapse of the USSR, the external debt of the Russian Federation steadily increased and reached its maximum immediately after the 1998 crisis, it reached USD 129 billion, which was 146.4% of the country's GDP. After that, starting in 2000, its rapid decline began, thanks to the competent government policy and the rise in energy prices.
As of January 1, 2012, the external public debt amounted to 35 billion 801.4 million dollars. USD, which is 10.4% less than at the beginning of last year. As of January 1, 2011, the external public debt amounted to 39 billion 956.9 million USD.
The state of the external public debt from 2000 to 2012 is presented in Table 1 (Appendix A).
But according to the federal law "On the federal budget for 2012 and for the planning period of 2013 and 2014", to combat the budget deficit, the government will annually increase the volume of public debt. So, by the end of 2012, it is planned to collect external loans for 7 billion US dollars, in 2013 they will increase to 8.3 billion US dollars, and in 2014 will increase to 14.1 billion US dollars. According to the government, the growth of external debt will be within the "danger zone", the debt burden should remain moderate, and the borrowing policy should be reasonable, which ultimately will create conditions for growth in the private sector, ensure the investment attractiveness of the national economy, and maintain the country's most important competitive advantages. However, the deputy chairman of the Public Council under the Ministry of Finance, Yevsey Gurvich, fears about the rate of growth of external debt. Especially if the level of the budget deficit becomes chronic. "Then the debt problem will worsen," says Gurvich. And this, he said, will weaken macroeconomic stability, interest rates will start to rise, debt service costs will increase, and economic growth will slow down. The main state budget expenditures, for which loans are required, are associated, according to Gurvich, with the military armaments program, the costs of the Sochi Olympics and the holding of the APEC summit in Vladivostok.
The dynamics of external debt growth from 2012 to 2014 is shown in Figure 1 (Appendix A)
Today, the foreign debt of the Russian Federation consists of:
debts to the Paris Club;
debts to countries that are not members of the Paris Club;
debts to the CMEA countries (Council for Mutual Economic Assistance);
debts of international financial organizations;
commercial debt of the USSR;
market loans (Eurobonds);
provision of guarantees of the Russian Federation in foreign currency.
A part of Russia's internal debt, formalized in foreign currency bonds of the Ministry of Finance (OVVZ), is also circulating on the world market. They are often included in the volume of Russia's external debt, especially in the studies of foreign economists.
The structure of external debt as of January 1, 2012 is presented in table 2 (Appendix B)
2.2 The current state of the internal debt of the Russian Federation
The rapid repayment of external public debt in recent years is directly related to the growth of domestic debt. Since the main source of repayment of external loans is domestic government borrowing. Internal loans are less dangerous for the country's economy than external ones, since there is no leakage of goods and services abroad when the internal debt is paid off. Therefore, today the main part of the state debt of the Russian Federation is made up of domestic loans - 84% of the total debt. So on January 1, 2012, the domestic public debt amounted to 4.19 trillion. rub. which is 8% of the country's GDP. As of January 1, 2011, this figure was equal to 2.94 trillion. rub. Thus, the volume of domestic public debt for the year increased by 1.25 trillion. rubles, or 42.5%. Of the total, the debt in government securities amounted to 3.55 trillion rubles. (growth for the year by 44%), the volume of state guarantees is 0.64 trillion rubles. (up 35%).
The state of domestic public debt in the period from 2000 to 2012 is shown in Table 3 (Appendix B)
Domestic debt is growing rapidly for the third year in a row due to the budget deficit, which is covered mainly by domestic loans. In 2009, it increased by 40%, in 2010 - also by 40%, in 2011 - by 42.5%. As a result, over the past three years, the total amount of domestic debt has almost tripled - from 1.5 trillion. rub. at the beginning of 2009 to 4.19 trillion. rub. at the beginning of 2012.
The Government of the Russian Federation has developed a new policy in the field of internal public debt for 2012-2014, aimed at:
ensuring the balance of the federal budget while maintaining the high degree of debt sustainability achieved in recent years;
development of the national market for government securities;
active use of the instrument for issuing state guarantees of the Russian Federation.
The key tasks in the area of government domestic borrowing will be to increase the liquidity of the market share of government domestic debt, expressed in government securities, and to maintain profitability in the government securities market. The program of government internal borrowings of the Russian Federation for 2012-2014 was developed taking into account the possible demand for government securities from various categories of investors and provides for a significant positive balance of borrowings in the domestic market.
According to the federal law “On the federal budget for 2012 and for the planning period of 2013 and 2014”, the domestic debt will continue to grow and by the end of 2014 will grow 2.2 times. By the end of 2012, it should reach 6.33 trillion. rubles, in 2013 7.87 trillion. rub., 2014 9.22 trillion. rub. which is 14.5% of the country's GDP. The constantly growing domestic debt puts significant pressure on the Russian stock market, reducing the investment attractiveness of the country. However, with an increase in energy prices, borrowing plans may be reduced. This happened in 2011, in the face of a surplus budget, the Ministry of Finance borrowed 300 billion rubles. less than expected.
The dynamics of growth of domestic public debt from 2012 to 2014 is shown in Figure 2 (Appendix B).
The current domestic debt of the Russian Federation consists of:
fixed rate government savings bonds (GSO-FPS);
constant interest government savings bonds (GSO-PPP);
federal loan bonds with debt amortization (OFZ-AD);
fixed income federal loan bonds (OFZ-PD);
bonds of domestic bonded loans of the Russian Federation (OVOZ);
provision of guarantees of the Russian Federation in the currency of the Russian Federation.
The structure of domestic debt as of January 1, 2012 is presented in Table 4 (Appendix B).
3 The impact of the state debt of the Russian Federation on the national economy
Significant amounts of public debt have a significant impact on the country's economy. Among the problems of modern budgetary policy, the problem of public debt occupies a special place. It is one of the main problems of the Russian economy, which directly affects both the rate of economic growth of the country as a whole and the directions of financial and budgetary policy.
The impact of large public debt on the state of the economy is characterized by the following results:
interest payments on the public debt require corresponding budgetary expenditures and cannot be reduced. The high level of such expenditures affects the limitation of financing of other items of expenditure, primarily social;
tax rates are raised to service public debt. Only when the amount of taxes collected exceeds 20% of GDP is the government in a position to service its debts. This figure coincides with the share of tax revenues in Russia's gross income;
there is an increase in interest rates in the country. The state, forced to refinance a significant amount of debt, acts as a large borrower in the financial market, creating competition between issuers, which leads to an increase in interest rates on loans;
it is possible to shift the debt burden onto future generations. It is very important for what purpose the government loans went. If they were spent on current consumption, instead of going on investments and modernization of production, the income from which would make it possible to pay off debts in the future, then the increase in debt and interest on it will lead to a decrease in growth rates and limitation of consumption in the future. In other words, if the growth of public debt is not accompanied by a corresponding increase in investment, then this leads to the fact that debt repayment is passed on to the next generation, reducing the consumption of future taxpayers;
repayment of external debt leads to the drain of financial resources from the country, which reduces consumption and investment in the national economy;
Income inequality is formed, since the largest part of government obligations is concentrated in the wealthiest part of the population. As a result, the repayment of the internal debt leads to the fact that the funds received from the least protected segments of the population are transferred to the wealthier. As a result, the one who owns the bonds gets even more richer.
Modern reserves of Russia's solvency include: a surplus of the current balance of payments, foreign investment, foreign exchange reserves and debts of foreign states to our country. Over the past few years, there has been virtually no improvement in any of these positions. Investments are growing, but extremely slowly. Debts are reluctantly returned to us (15-20% of the planned amount). Russia's solvency, at least in the medium term, can be ensured only from the federal budget, which will remain the only available source of funds for debt repayment and servicing.
Today the total debt of Russia is 178.8 billion US dollars, of which 16% are foreign loans, and 84% are domestic. Such a predominance of domestic debt over external debt is a consequence of deliberate government policies. Since domestic debt is a relationship between the citizens of a given country, when it is returned, there is no direct loss of goods and services. The external debt is repaid by selling goods to other countries. In order to pay off the external debt, the country must reduce imports and increase the export of goods, while the proceeds from exports go not for development purposes, but for debt repayment, which slows down the growth rate and thereby lowers the standard of living. And as long as there is external debt in Russia, our economy will not be able to fully develop due to the constant leakage of funds abroad.
Conclusion
At present, budget deficits have become a frequent occurrence for the state budget of most countries. Recently, the federal budget of the Russian Federation has also become deficit. The budget deficit can be the result of an unfavorable economic environment or the result of a purposefully pursued budget policy.
There are various ways to finance the budget deficit. If it is carried out through the emission of money, then this leads to an increase in the amount of money in circulation, an increase in prices and inflation. Covering the deficit with private sector loans reduces private investment as a result of the issuance of government securities.
The budget deficit is inextricably linked with the concept of public debt, which, depending on the sources of the loan, can be internal and external. Significant government debt negatively affects the economy: it leads to an increase in the stratification of society, adversely affects the rate of economic growth, the cost of servicing the public debt increases the budget deficit. The external public debt is paid off at the expense of earnings from exports, which can also adversely affect the pace of economic development.
The most important legislatively enshrined measures for public debt management include the establishment of maximum volumes of public internal and external debt, the boundaries of external borrowing; sources of domestic financing of the budget deficit, including receipts from the issuance of government securities; the maximum amount of external borrowing; the cost of servicing the state internal and external debt; upper limits of state internal and external guarantees.
The current economic state of the Russian Federation is characterized by a budget deficit. The main share of the sources of financing the budget deficit falls on domestic financing. As a result, the Reserve Fund, which is used as one of the main sources of financing the federal budget deficit, is severely depleted.
In addition, the amount of public debt, both internal and external, is constantly increasing. In the future, a further increase in debt, especially domestic debt, is expected.
Based on all this, we can conclude that these phenomena have an adverse effect on the development of the country as a whole. Therefore, the government needs to develop and implement special programs, both to reduce the budget deficit and to reduce internal and external debt. Only the adoption of effective measures in these areas will contribute to the socio-economic development of Russia.
List of used literature
1. The Budget Code of the Russian Federation of July 31, 1998, No. 145-FZ (as amended on June 27, 2011).
Federal law "On the federal budget for 2012 and for the planning period of 2013 and 2014" from 30.11. 2011 No.-371-ФЗ.
Anisimov A.S. State debt of Russia. Moscow: Economics, 2000.350 p.
Alekhin B.I. State debt. M .: Unity-Dana, 2007.336 p.
Borisov S.M. External debts of Russia. Money and Credit, 2010. No. 2. 24 - 29 p.
Babich A.M., Pavlova L.N. State and municipal finance: Textbook for universities. Moscow: YUNITI, 2002.687 p.
Braginskaya L.S. State debt. Analysis of the management system and assessment of its effectiveness. M .: University book, 2007.10-55 p.
Vavilov Yu.Ya. Public Debt: A Textbook for Universities. Ed. 3rd, rev. and add. Moscow: Perspective, 2008.256 p.
Voronin Yu., Kabashkin V. Public Debt Management. Economist. 2006. - No. 1. S. 58 - 67.
Vorozhtsov PO On the principles of Russian policy in the field of public debt management. Securities market. - 2005. - No. 18.
Danilov Yu.A. Public Debt Markets: Global Trends and Russian Practice. Moscow: MAKS Press, 2008.432 p.
Dadashev A.Z., Chernik D.G. Financial system of Russia: Textbook. allowance. Moscow: INFRA-M, 2006.248 p.
Kozikova E.N. Public external debt. Functioning in the economy of the borrowing country. Moscow: MAKS Press, 2004.210 p.
Matskulyak I. D. State and municipal finance. M.RAGS, 2007.640s.
Shabalin A. Dynamics of state and corporate debt. Economist, 2010. No. 3. 50-57s.
16.<#"justify">Appendix A
Refinancing- repayment of old government debt by issuing new loans.
Conversion- a change in the amount of profitability of a loan, for example, a decrease or increase in the interest rate of income paid by the state to its creditors.
Consolidation- extension of the term of already issued loans.
Unification- consolidation of several loans into one.
Deferral of loan repayment is carried out in conditions when the further active development of operations to issue new loans is not effective for the state.
Debt cancellation- refusal of the state from debt obligations.
Debt restructuring- repayment of debt obligations with the simultaneous implementation of borrowings (assuming other debt obligations) in the volumes of debt obligations to be repaid with the establishment of other conditions for servicing debt obligations and the timing of their repayment. The Budget Code of the Russian Federation states that debt restructuring can be carried out with a partial write-off (reduction) of the principal amount.
State debt- these are issued and not extinguished obligations of state authorities.
Debt classification according to various criteria:
1) Depending on the degree of coverage of the set of obligations:
Principal debt (the entire amount of debt of the state, for which the due date of payment has not come and which cannot be presented for payment during this period)
Current debt (debt of the state for obligations for which the due date has come)
2) by the form of obligations:
Loan attracted on behalf of the Russian Federation
State security of the Russian Federation
Budget loan of the Russian Federation - the state guarantee of the Russian Federation
3) depending on the borrowing market, the type of the lender and the borrowing currency:
Domestic (debt in the currency of the Russian Federation)
External (foreign currency debt)
4) by type of borrower:- the debt of the Russian Federation - the debt of the constituent entities of the Russian Federation - the municipal debt
5) by urgency:- short-term (less than 1 year)
Medium-term (from 1 to 5 years)
Long-term (from 5 to 30 years inclusive)
The existence of public debt also implies the need to manage it. Public debt management is understood as a set of actions by the state represented by its authorized bodies to regulate the size, structure and cost of servicing public debt.
The growth of public debt has many negative consequences:
1.the existence of external debt involves the transfer of part of the domestically created product abroad
2.It entails a decrease in the standard of living of the population
3.increase in tax rates as a means of paying off the state internal debt can undermine the effect of economic incentives for the development of production
Sources of repayment of public debt : state budget revenues and funds of the reserve fund.
The supreme body of government debt management - Federal Assembly. Within the framework of the federal law on the federal budget, it establishes the most important parameters public debt: limits on domestic and foreign public debt; the maximum volume of annual external borrowing; the cost of servicing public debt in the current year
Of particular importance is the process public debt management- a set of measures by the state for the adoption, regulation and repayment of financial borrowings. It is carried out at the level of the Russian Federation - by the Government of the Russian Federation, in the constituent entities - by executive authorities, in municipal associations - by local self-government bodies.
Public debt management methods :
1) restructuring - repayment of debt obligations = simultaneous borrowing in the same volume of other debt obligations with the establishment of different conditions for servicing the public debt (interest payment, debt amount, maturity);
2) obtaining a technical loan - the provision of a new loan by the lender used to pay off the old debt;
3) prolongation of the loan agreement - extension of the term of the loan agreement;
4) consolidation - combining various debt obligations and replacing them with another debt obligation;
5) convention - maintaining the level of profitability of debt obligations;
6) determination of the maximum size of annual borrowing.
3 Public debt management
1 Current state of the external public debt of the Russian Federation
2 Current state of the internal public debt of the Russian Federation
Conclusion
Bibliography
Appendix A
Appendix B
Appendix B
Appendix D
