FORMATION OF INDUSTRIALLY FINANCIAL GROUPS IN THE CONTEXT OF TRANSBORDER COOPERATION OF UKRAINE AND POLISH REPUBLIC IN THE CONTEXT OF THE STATE ENTRANCE IN EU

Ternopil institute of social and informative technologies, Ukraine boryk_olya@ukr.net

FORMATION OF INDUSTRIALLY FINANCIAL GROUPS IN THE CONTEXT OF TRANSBORDER COOPERATION OF UKRAINE

AND POLISH REPUBLIC IN THE CONTEXT OF THE STATE ENTRANCE IN EU

Abstract

Features of forming industrially financial groups (IFG) in the context of becoming market relations in Ukraine have been exposed in the article. It has been given the general features and differences of their construction, taking into account the home and foreign ex- perience. It has been shown their socio-economic role in realization of state strategic purposes while entering in European Union. It has been proposed a model of cooperation organization between industrially financial groups participants from the various states, in particular crea- tion of the purposeful transborder Ukrainian-Polish industrially financial groups.

Key words

Industrially financial groups (IFG), Economic Integration, transborder cooperation.

Introduction

The existence in Ukraine the wide number of problems from effective resourcefully powerful potential using stimulates the necessity of intergovernmental cooperation in their decision. It is possible to decide these problems by organization of purposeful transborder Ukrainian-Polish industrially financial groups that causes a necessity of deep scientific devel- opments in these spheres of economic activity and strengthens the problematic actuality.

The legitimacy of such conclusions confirms present foreign experience. Indeed, the quickest way to attain a purpose of production modernization in the conditions of globaliza- tion is by creation of, so called, financial industrial unions, in which enter: from one side the industrial enterprises, scientific, informative establishments, which present powerful produc- tion possibilities and resources or production potential, and from the other side bank or other financial institutions.

In the process of market transformations in Ukraine, and in the context of our state en- trance in European Union, the problem of capitals integration becomes very actual, both for providing efficiency of concrete production and national economy development generally, and also for certain strategic goal achievement. In the conditions when the success of econ- omy subjects in a lot of cases is dictated by demand on those or other eventual results of ac- tivity: services, works or commodities, such integration and union of capitals is expedient and possible, as a rule, on the contractual, voluntarily bases. Under such circumstances, the role of the Polish partners consists in the active investment position, in particular enlisting direct in- vestors and entrance of Polish and other European banks IFG, insurance companies, invest- ment, trust companies and other financial mediators.

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Quite a bit number of scientific works of home scientific and practical workers are de- voted to problem of IFG creation. In the most foreign countries bank and industrial structures union is called financial industrial group. Abroad the founders of researches in the sphere of capitals union and financial and industrial sectors facilities are: Gilferding R., Marshall A, Hayek F, and Chamberlain E. The great role in research of such type of union’s activity had also Ukrainian scientists NAS of Ukraine, Donetsc national university and Institute of econ- omy, the Lviv institute of regional researches, the National University «Lviv polytechnic», the Kiev institute of economy.

In obedience to the legislation of Ukraine, such unions are determined as industrially financial a group, that underlines a leading role of industrial components. One of the most effective form of such integration, coming from the above-mentioned reasoning, is forming, unlike the present foreign experience, actually industrially financial groups, as a self regulated system, that is very important not only for activation of economy market transformations, and in the greater measure for certain goal achievement without the department interests losing.

The research purpose

is to consider the possibilities of IFG forming in the conditions of Ukrainian-Polish cooperation, in the context of Ukraine entering in European Union; and lead to the necessity of union creation, as a way of national economy industries exit from the crisis situation.

The technology of IFG forming foresees the main enterprise determination, which se- cures final goal achievement and shows its interests at all levels. In the machine-building, electronic, recycling and build materials industries conditions, such enterprises can be: spe- cialized machine-building, recycling plants, factories, which produce a cement, brick, rein- forced build materials and other products.

Actually, in the machine-building and electronic industries, recycling and build mate- rials industries, the main enterprise and other participants of the industrially financial groups must make General agreements about the compatible activity in relation to certain goal achievement that is the organizations of final, competitive in the European environment, products production. An agreement is subject to claim by the House of Ministers of Ukraine decision on every branch in particular.

It is necessary to remember, that with the purpose of business monopolization avoid- ance and producers definite plots, IFG creation in the trade field, public food consumption, domestic consumer services of population, material and technical delivery, transport services is forbidden by the state.

The basic signs of so called purposeful IFG, which distinguish them from other forms of enterprises unions (holding, associations, consortia, cartels, trusts, business concerns, syn- dicates, pools), that consolidate the resources with the purpose of additional competitive edges receipting, are:

- obligatory presence of banks, other financial establishments and industrial organiza- tions, that allows concentrating the resources and using them purposefully to achieve the aim;

- the presence of main, responsible, central company or main enterprise;

- state examination of projects creation and industrially financial groups organization;

- state registration and granting to the union industrially financial group status;

- belonging of enterprises to the priority industries of production, determining for the structural alteration of Ukraine economy.

As experience shows, for the life-supporting of system, it is expedient to structure the industrially financial groups according to the spheres of their activity.

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A basic task of the financial block IFG activity, in the conditions of transborder coop- eration this will be the Polish constituent, is the financial resources bringing and accumula- tion, which are necessary to convert into the inlying investment sources, and send in industrial and commercial blocks for the systematical using in achievement of the marked purpose. Ex- cept of this, a financial block is responsible for the economic safety, risk management, correct construction of inlying economy of all group – for organization of it as a self regulated sys- tem.

Such following establishments enter in the financial economic block: commercial banks, insurance, investment, leasing, financial, venture, ration, trust, pension funds and com- panies.

Abroad the industrially financial groups are justified as locomotives of economic de- velopment, and the role of universal commercial bank consists in implementation of its func- tions as financial kernel of group, financial structure leader. Both large and small banks can enter in the marked groups, and it doesn’t matter whether it will be a large bank or union of banks, they have to realize next functions: bank as a keeper, financial resources store; bank as a creditor; bank as a communication center that maintains the accounts and economic compu- tations of clients.

The cooperation of banks and clients within the limits of IFG assists, on the basis of corporate income, the every participant’s profits optimization. The integration of industrial, financial and trade capitals allows a bank to grow the assets. Bank service reliability is se- cured by the business partnership. There is vicious thought that the industrially financial group will automatically become more firm, finding itself a reliable bank. In addition, the commercial banks in IFG composition carry out the finance, investment projects manage- ment; they also secure their financing, leasing, factoring and venture investing, and strategic purpose achievement.

In the process of different forms of capital cooperation the special inlying environment is formed with its inlying organization with its own characteristics and functioning mecha- nisms, which allow mobilizing a capital in the large scales that is extraordinarily important for the long-term investing. As experience confirms, IFG should not be considered only as a mean of bringing resources for the large business. To unite the enterprises of small and mid- dle business in the industrially financial groups is good to create a financial investment center in their structure, which will designate a primary aim and purposes of second order, will co- ordinate the work of small and middle firms with the potential inward group and external (foreign) investors.

The main center work directions are: complex maintenance of the investment process participates; search of business partners and investors; business plans projects preparation; the joint ventures creation; bringing credits for the strategic projects realization; conducting of international forums, exhibitions, conferences with presentation of industrially financial group potential. The financial mediators, as investment funds and companies can also enter to the organizational structure IFG. The essence of their activity consists in bringing of shallow de- positors savings by their own shares production and direction of money resources issue in securities of various companies – industrial, trends, transport, credit and insurance. On the first stages of industrially financial group creation before the time of investment funds and company’s creation, their functions are on the banks responsibility. Similarly as well as in the case of bank mediation, the investment company’s activity enables to mobilize and store de- positor’s money potential.

The important not bank financial institutions within the industrially financial groups are unstated pension funds and insurance companies. For the industrially financial group own pension fund is the reliable source of long-term resources, which are accumulated after the receipts from employers and workers of all enterprises, firms and establishments, that are in-

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cluded in the industrially financial group, and also external depositors, and reserve for the social defense of its workers. Actually, the problem of fixing shots, managers and workers of all blocks and levels is decided in such terms. They all are pierced by the corporate spirit and work to incarnate at the life general strategy of group. Today the function of bringing long- term credits or „long money” execute insurance companies, which attend to life-insurance workers and will realize the programs of the long-term insurance and health story.

The insurance companies accumulate insurance payments of legal and physical entities and pay insurance sums in the case of insurance case offensive. The mentioned organizations secure industrially financial groups by the stream of long-term money resources and come both as the market investors, so as the inlying investors. Insurance companies and banks work is the most effective in cooperation with the main bank of industrially financial group. Insur- ance company together with the bank serves the industrial, commercial and transport sectors of industrially financial group, their workers and takes part in development of their capitals that double the investment resource of explored establishments. Such cooperation multiplies an income of both bank and insurer, and also assists small and middle firms’ development, which are the technological bases for large enterprises.

Except of commercial banks, which offer about 200 types of services today, the not bank borrowed saved institutions can enter in the complement of industrially financial groups.

This structure accumulates the capitals of shallow depositors and carries out the investments in the financial and other assets. Their activity is similar with banks activity, but they are ori- ented on the individual depositor, that’s why in the world they are called «establishment of domestic economy». Examples of such establishments are cash desks of mutual aid, financial pools, and societies of the mutual crediting. In Ukraine, on the given time, credit unions are the most widespread. The efficiency of IFG work in the great deal can be determined by the services spectrum, which are proposed to workers by their borrowed saved establishments, that is very substantially in case of many strategic problems workers decision, which appro- priately affect realization of strategic purposes. Such services can be: extra charge on depos- its, crediting, bringing the short spaces deposits, automatic account converting in other cur- rency, pension holding, holding on the purchase of habitation, story holding on the purchase of expensive goods and services, sale and purchase on the client instructions of state and mu- nicipal securities, consultations on the resources investment in other financial structures, prof- its from valuable papers insurance, purpose accumulations, reception of holding from a few persons simultaneously, short-term loans under the firm-employer guarantee, maintenance of cheque turn and others. The borrowed saved establishments can also initiate the common fi- nancing of the industrial and housing building from the combined resources of industrially financial group members.

Like industrially financial groups the trust companies own the large economic feasibil- ities too. As the form of assets and property on warrant management, the trust company (con- fiding society) can be organized separately, or as trust (confiding) subsection of main bank of industrially financial group, but in any case its activity brings the profits and additional firm- ness to the group. The most effective way to use the trust operations is as the auxiliary facili- ties in case of reorganizations and redistributions of own, absorptions and sales.

It is good for IFG to create Ukrainian-Polish venture companies, of course, not at the beginning of the groups’ activity, but afterwards. In terms when competitive edges at the market are determined by the corporate possibilities to introduce the innovative technologies, venture capital will extremely place an important role. For outstripping strategy realization of industrially financial group, its expansion must be secured by the optimum correlation of the stable functioning of already existent enterprises, and their dynamic development with intro- duction of new structural links, new technologies, which allow the group to achieve the aim and realize other competitive edges.

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Consequently, forming purposeful transborder industrially financial groups can be- come a mean of exit of Ukrainian national economy industries from the crisis situation. The basic task of the financial economic block IFG participants is bringing, accumulation and placing of resources with the optimum profit level, risks minimization, close collaboration with purpose the cost overhead, rise of mutual computations efficiency and work perfection with the general base of clients cutting. The special role is devoted to the financial block in providing social projects, directed for satisfaction of workers necessities of all without the exception establishments – the industrially financial group participates. From this point of view, the important role has the regional intergovernmental priorities of IFG creation on the basis of small and middle business.

Thus, studying of the creation and work experience, both of foreign and home indus- trially financial groups, grounds to claim that on the given time the process of their forming takes place without proper scientific bases and without consideration of Japan, Germany and the USA experience in creation and functioning of such unions.

From the state organs side there is no positive conditions for creation of Ukrainian- Polish industrially financial groups in the crisis industries and in particular in machine- building, processing, electronic, builds materials and other strategic industries of national economy of Ukraine, and achievement on this basis of definite economic and social effects.

There is no improvement in this direction in a legislative and normative base that breaks the transborder IFG forming for achievement of aim of getting them out of stagnation and rising of their competitiveness at the European market.

The responsible state organs on the given stage do not assist in creation of the personal interest in cooperation between the credit-financial establishments of Polish Republic and industrial structures of Ukraine for achievement of the marked general purpose.

Conclusion

On the basis of foregoing, with the purpose of assistance in forming and development of purposeful industrially financial groups, going out from the present raw material resource base and scientific intellectual potential of the Ukrainian regions, for the problems decision and in particular machine-building industry revival, electronic industry, recycling and mate- rial line-up industries, in the context of entrance of Ukraine in European Union it is good to foresee the system of fiscal and credit benefits, concordance of the Ukrainian legislative base in the sphere of investing and financial-credit operations with the proper legislation of EU countries and international agreements.

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