STRUCTURAL TRANSFORMATION OF STATE BUDGETS: A COMPARATIVE ANALYSIS OF BUDGETARY STRATEGIES IN RUSSIA AND THE EU UNDER GEOPOLITICAL INSTABILITY

This article conducts a comparative analysis of structural changes in the budgetary systems of the Russian Federation and the European Union during a period of geopolitical instability (2021–2025). Based on empirical data, a growing divergence in strategies is identified: the Russian budget demonstrates a radical shift towards the dominance of defense and security expenditures against a backdrop of real contraction in social and investment items. In contrast, the EU budget maintains a balanced, diversified approach prioritizing long-term investments in green and digital transformation. The scientific novelty of the work lies in the development and application of the authors’ Structural Divergence Index for the quantitative assessment of the degree of divergence between budgetary models. As a result, two distinct paradigms are identified – the “defense-debt” model (RF) and the “balanced-investment” model (EU). The fiscal risks associated with each are systematically evaluated, and directions for adapting Russia’s budgetary policy to enhance its long-term sustainability are proposed.