State / municipal debt - the resultborrowings made to cover the budget deficit. It is formed by the sum of deficiencies in past years minus the surplus. Let us consider in more detail how it is implemented management and maintenance of public and municipal debt. 
General information
TO State debt of the Russian Federation include obligations to:
- Legal entities and physical persons (foreign, including).
- Subjects of the Russian Federation.
- International financial institutions, other subjects of international law.
- Foreign States.
State debt also form obligations:
- on state guarantees provided by the Russian Federation;
- arising from the adoption of laws on the assignment of debts of third parties to public debt.
Terminology nuances
В соответствии с положениями законодательства, allocated national and public debt. The first concept is considered broader. The national debt consists not only of the obligations of the government of the Russian Federation, but also of the governance structures of the republics included in the country, as well as self-government bodies.
Security
It is carried out at the expense of the federalproperty, forming the treasury of the country. Despite the fact that the credit relations are secured by the treasury, the federal budget goes to pay off debts (public debt service).
Budget Code contains imperative instructions for the federal structures of state power to exercise all the powers to raise revenues to repay obligations.
Composition
Government debt of the Russian Federation - A direct consequence of the credit policy of the authorities of the country. The composition is determined by the form of the loan - a method of attracting free (temporarily) funds at the disposal of the authorities.
As establishes Article 98 of the BC, the volume of public debt includes:
- amounts of principal debt on loans;
- nominal amount of government securities;
- obligations under guarantees issued.
The composition of the debt does not include the payment of interest, as well as non-interest income from state borrowings. In accordance with the BC, they are an independent form of federal budget expenditures.
Management methods and public debt service
Public debt appears when coststhe state exceeds the flow of funds, that is, a budget deficit is formed. It is covered by government borrowing. The situation is similar with the municipal debt. The only difference is that borrowing is carried out at the local or regional level.
Government debt management is one of the directions of the state financial policy. It is a set of activities related to public debt service, its repayment, issue, placement of loans. Management includes the regulation of the state credit market.
Management methods include:
- Refinancing.It represents the repayment of old debt through the issuance of new loans, involving the replacement of liabilities that are due to expire, new bonds or short-term debt long-term.
- Conversion. It represents an adjustment to the original terms of a loan issued earlier. In particular, the yield changes (the percentage decreases or rises).
- Consolidation. It involves the extension of the loan by combining several obligations into one long-term. In this case, as a rule, the loan percentage changes.
- Unification.In this case, several loans are also merged, however, the previously issued bonds are exchanged for new ones. The purpose of the method is to reduce the number of types of securities, which, in turn, optimizes the work with them and reduces costs. In some cases, a regression agreement exchange may take place. This means that several bonds issued earlier are equal to one. Such an exchange, for example, was conducted after the war to withdraw military bonds from circulation. The ratio was 3: 1 (three previous to one new).
- Delay of repayment. It represents a postponement and termination of payments for a certain time.
- Cancellation.It implies a total waiver. This can happen for various reasons: financial insolvency, the coming to power of those who refuse to recognize the obligations of the past government, etc.
- Реструктуризация.It involves a review of the term of interest payments or repayment of the principal, reduction of the rate, cancellation of a certain part of the debt. As a rule, this method is used when solvency deteriorates in the presence of signs of bankruptcy. According to Article 105 of the BC, restructuring is the termination of state obligations with their replacement by other obligations implying other conditions. public debt service and its redemption.
- Buyout. In the secondary market of financial instruments, the debtor country can redeem its obligations.
Public debt service activities
The main of them include:
- payments to creditors;
- the provision of guarantees;
- repayment of domestic / foreign loans;
- determination of conditions for the release and placement of new obligations, etc.
The effectiveness of these activities depends onvalidity of decisions made. She, in turn, is based on a thorough analysis of the structure and volume of public debt, an objective assessment of the current state of borrowing.
Normative base
The provisions governing the service of public debt and municipal borrowing, enshrines Article 119 BC.
Under it understand the set of operations for the payment of income in the form of interest or discount. ABOUTstate (municipal) debt service carried out from the budget of the appropriate level.
In p.2 of this article establishes that the Central Bank, the credit structure or other specialized financial organization perform the tasks of the Government agent for the implementation of these operations, as well as for placement, exchange, repurchase, repayment of obligations. This activity is carried out in accordance with the agency agreements concluded with the Ministry of Finance. The functions of the general agent of the Central Bank are performed free of charge.
How to install article 119 BC, payment for the activities of agents for the implementation of tasks enshrined in agreements signed with the Ministry of Finance is made from the federal budget.
Реализация кредитной структурой либо иной the specialized organization of the functions of the agent of the executive body of the state authorities of the region of the Russian Federation is carried out in accordance with agreements concluded with the executive institution of the authority of the entity engaged in borrowing.
Contracts can be signed with the local administration (when servicing the municipal debt). In this case, the payment of agency services is carried out from the local budget.
Maintenance costs
They are referred to in Art. 111 BC.
The cost of servicing the public debt subject or municipal borrowing are planned annually. The estimate is approved by the law on the relevant budget.
The marginal cost of servicing the public debt by performance report indicatorsbudget revenues for the reporting period can not be higher than 15% of the total budget expenditures. This does not take into account the costs incurred due to subventions.
Key principles
Public debt service is based on:
- Unconditioned. It involves ensuring accurate and timely repayment of obligations to investors and creditors without additional conditions.
- Consistency. It involves the maximum harmonization of the interests of the lender and the borrower.
- Unity of accounting In the course of managing and servicing state debt, all types of securities issued (issued) by state authorities, regional structures and municipalities should be taken into account.
- Unity credit policy. It involves the use of a unified approach in the implementation of the management and debt service activities of the center in relation to the MO and the regions.
- Risk reduction. Financial policy should include all necessary measures to reduce the risks of both lenders, investors, and the debtor itself.
- Publicity All interested users should receive timely and complete information about loans.
- The optimality.Such a system of government loans should be formed, at which their repayment will be carried out with minimal risks. At the same time, operations should have the least negative impact on the economy.
Authorized Subjects
In accordance with Article 101 of the BC, management:
- the state debt of the Russian Federation is carried out by the Government or the Ministry of Finance authorized by it;
- the state debt of the region - the highest executive institution of power or financial structure authorized in accordance with regional legislation;
- municipal obligations - the executive and administrative body of the municipality (local administration) authorized by the charter of the municipality.
Conclusion
The magnitude of the national debt is determinedthe performance of all lending operations performed by the state. The absolute indicator of borrowing, their dynamics, the pace of change characterize the state of the country's finances and economy, the effectiveness of the work of financial organizations.
During the recession, according to the classical approach tomanagement of obligations, it is advisable to reduce the amount of public debt. Otherwise, the debt will adversely affect the financial condition of the country and its economy.
An alternative approach is based onopposite concept. In accordance with it, with a decrease in business activity, the value of loans should be reduced. At the same time, the national debt will perform the functions of a financial mechanism that will accelerate economic development.
Государственные заимствования могут быть useful only during sustainable economic growth. During periods of recession, the budget deficit can significantly worsen the financial condition of a country, increase the threat of a debt crisis and lower the country's reliability rating. This, in turn, leads to a deterioration in the overall economic condition. The growth of public debt leads to real negative consequences for the financial, economic and social sectors.
