Decentralization of management mechanisms in the EU member-states with different form of state government and practical possibility of implementation of such best practices in Ukraine are the main scientific problems of the article. The article aims to identify the main patterns of financial support transformation for local authorities in the EU member-states and to justify system elements of the decentralization in Ukraine implementation.
The main features of the local units of administrative and territorial structure formation in various EU member-states are defined. The processes of local government optimal form identification are explored in the article. It this context the regularities of different sub-national government levels strengthening for various schemes are discussed. On the basis of the empirical experience summarizing of unitary, federal and quasi-federal countries of northern, central and southern Europe the key elements of the regional development model requiring main attention were identified. The key aspects of practical experience of amalgamation and cooperation processes on the local level for the purpose of local government strengthening in Nordic and some post-socialist Central and Eastern European countries are revealed. The implementation prospects of a wide range of local authorities’ powers through the mechanisms of inter-municipal cooperation are discussed. The features of administrative reforms in the EU member-states that led to the strengthening of the various sub-national levels – local and regional are disclosed.
Regional development is considered in the article as the object of regional, national and supranational governance. The dynamics of the volume of financial resources of EU structural funds allocated for regional development is analyzed. Comparison of regional development financing principles of European Regional Development Fund and the State Fund for Regional Development of Ukraine is made. Problematic aspects of Ukrainian model of fiscal decentralization are outlined.
Authors insist that the decentralization model with significant strengthening of the local level can be considered as optimal for Ukraine. Regional administrative-territorial level in Ukraine is optimal from the standpoint of eligibility NUTS 2 and, in the case of Ukraine’s accession to the EU, the regions could become objects of EU cohesion policy. Therefore at this level it is advisable to develop practical co-funding of regional development projects by clear objectives from the State Fund for Regional Development of Ukraine and regional budgets. At the local level it is important to ensure adequate mechanisms of the realization of such a model, which at present are incomplete and provide only association communities.
However even after passing of communities consolidation most of them could hardly become financially self-sufficient. The planned average size of local communities in Ukraine of 9 000 of residents is not satisfactory for the governing purposes. Even in such countries as Finland it was not possible to carry out a wide range of functions independently. Foreign experience shows that the optimal performance of the functions of health care facilities is in the community that spans over 20 000 people, and education – over 50 000. This means that even the consolidated territorial communities need additional tools for combining efforts with other communities to perform a number of functions. 

decentralization, local finances of the EU member-states, local government, consolidation of administrative units, inter-municipal cooperation