Public Finance, Financial System and Financial Law

The new Public Finance Act in force since 2014 is a real challenge for financial economic theory and financial law theory as well. From a conceptual point of view the new legal regime raises the issue of defining such notions as “public finance” and “financial system”. The essence of the ‘public finance’ notion is in principle identical to the content of the financial system and the financial law regulation notions. Financial law science should reconsider the idea of the financial law as positive law and its underpinning legal concept of finance in the context of the new act. As the law has a decisive role for establishing the financial system (public finance) a criterion for delineating this system could be formulated as follows: Existent and functioning legal regime which frames: 1) financial legal relations of authority-subordination type for collecting receipts and carrying out spending, and 2) applying fiscal rules plus relations with the state budget aiming at receipts -expenditure balance. On the basis of the formulated criterion a conclusion has been drawn that the financial system is composed of a multitude of receipts-and-spending accounts which are organized and balanced through the powers (authority) of state bodies. The list of these accounts comprises: 1) the state budget as a central integrating core of the whole system; 2) the municipal budgets; 3) the budgets of social and health insurance funds; 4) the autonomous budgets of the Bulgarian Academy of Sciences, state owned universities, state owned broadcasting media and the Bulgarian Telegraph Agency; 5) the accounts for the EU funds; 6) the receipt-and-spending accounts of state owned enterprises and specially organized state funds which are balanced through the state budget; 7) the central bank budget; 8) the receipts and expenditures of the Deposit Insurance Fund; 9) the receipts and expenditures (budgets) of political parties which are balanced through the state budget.