Proceedings of the International scientific and practical conference ―Science in the Modern World‖ (May 4-6, 2026) / Publisher website: www.naukainfo.com. – Barcelona, Spain, 2026. - 260 p.

13 In modern conditions of development, the state uses public finances as a tool to strengthen or weaken the pace of economic and social development of the country. This tool makes it possible to distribute and redistribute a significant share of GDP and ensures expanded reproduction. Public finances form the basis of the country's economic security, because thanks to the public finance mechanism, which is an economic, organizational and legal method of managing financial resources, the state stimulates economic development, guarantees the provision of social services to the population. The quality of services and the pace of economic development are the barometer that characterizes the degree of perfection of the financial mechanism, its ability to meet social needs at a given stage of development. An important role in the effectiveness of the financial mechanism is played by the government, which, using appropriate levers and instruments, regulates socio- economic activity, taxes, subsidizes certain industries, provides loans, debt guarantees and provides insurance, helps the poor, and influences the production of goods and services. Thus, the government directly or indirectly, through relevant financial institutions financed by the state or by guaranteeing loans, influences the production of certain goods and services. In the current development conditions, in order to prevent instability and other challenges, it is important to develop a financial policy of the state that will meet the medium and long-term prospects of the country's socio-economic development. This will make it possible to ensure clarity, predictability, and gradual development of the financial system of Ukraine, to avoid instability and misunderstandings in the activities of financial institutions. Without the effectiveness of the functioning of the financial mechanism, the effective functioning of the entire financial system of the country is impossible, because public finances are its component. With the beginning of russia's full-scale invasion of the territory of Ukraine and until the end of hostilities, the Cabinet of Ministers of Ukraine adopted Resolution No. 326 of 20.03.2022 "On Approval of the Procedure for Determining Damage and Losses Caused to Ukraine as a Result of the Armed Aggression of the Russian